THE MORTGAGE APPLICATION PROCESS
:: AN OVERVIEW ::
Here is some information regarding the financing process. Please feel free to contact us with specific questions at any time.
Completing Your Application
In order to apply for a mortgage, you must complete an application detailing your current financial situation. Details include information yourself, any co-applicants and any properties you own, including the one you want to purchase or refinance. Depending on your preference, you may be able to complete your application over the phone, via email or in person.
Along with the application, you will need to provide written authorization and some initial documents to verify your information. These typically include bank statements, pay stubs, W2's and tax returns.
We as a broker send you initial disclosures detailing loan program, annual percentage rate (APR) and costs associated with the loan, as well as an estimation of the total payment and loan amount that will be borrowed for the mortgage you applied for. These documents are initial disclosures from the broker/bank to you and are not a binding contract. Documents include the good faith estimate which summarizes the terms of your loan and provides and estimated monthly housing payment and truth in lending disclosure which details the APR as required by law. You will also receive a set of papers from the bank which do not need to be signed.
**We must have signed disclosures returned to our office either via wet signatures or docusign in order to submit your loan to the underwriter.**
Our processing team will submit your loan package to the bank after we have received signed disclosures back from you and any co-applicants as well as supporting documentation. The underwriter for the chosen bank will render an initial approval based on the lender’s criteria of the loan program for which you have applied.
Your Home Appraisal
Generally, a professional, third party assessment of value is required as a condition of the loan approval. Depending on the complexity of your application, the appraisal gets ordered at loan submission or after initial approval is received. Sometimes is better to wait a few extra days to make sure the bank will approve your loan prior to spending the money on an appraisal as they are generally non-transferable by law.
The number and size of the rooms, type of home and acreage all determine the price of the appraisal. Generally single family dwellings under a million dollar value are roughly $450-550. Homes over a million or with other units range from $650-750. You automatically receive a copy of the report after it is released from the appraisal management system (AMC). Due to laws passed as part of the mortgage reform act, an AMC is used and loan officer contact with the appraiser is prohibited in certain instances.
Once you’ve received final approval, you are ready for closing. At closing, you will be required to pay any third party costs of processing your loan application. These costs can range from zero to up to 3% of the total loan amount and are reflected on the estimated settlement statement and the GFE. These may include charges such as appraisal, underwriting fee, a title policy, to name some examples. In addition to third party costs, you will be responsible for reoccurring costs that must be paid in advance according to the lender such as interest, taxes, insurance, HOA dues. These are determined by the date of closing and also are reflected on your estimated settlement statement and GFE.