The Mortgage Process

          Buying a home is a very fun and exciting experience, but it can also come with a

lot of work having to do with the mortgage process. That is why it is good to know what

you are getting yourself into and what exactly the process will look like. The first thing

you need to determine is how much you can afford. It is always good to know your

budget from the very beginning. Next, you need to talk to a loan officer to determine if

you qualify for a loan. When doing this, always make sure to talk to several lenders to

find the best loan for you. Also, always take precautions when going through the

process. You should find out about fees if you pay your loan off early, never falsify your

information, and be clear about any additional fees associated with your loan. This will ensure that you understand the total package when you go through with the process.
         When you enter the home buying process, you will be faced with a lot of paperwork and you will be working with a lot of people. The first person you will work with will be your loan officer. They will help to determine the amount you can spend on a mortgage loan by using your credit, financial, and employment information. You will then need a real estate agent who will help you find the type of home that you are looking for based on the preferences that you give them. A loan processor will then prepare the mortgage loan information. They will ask for documents from you such as your income, employment information, monthly bills, and the amount in your bank account. A mortgage underwriter will use that information to assess if you are eligible for a loan or not. After you have told the real estate agent which property you want, a real estate appraiser will determine how much that property is worth. You can then hire a home inspector to look through the property to make sure there are no potential damages that could affect you later after you have moved in. The last person that you will be working with is a closing representative. They will record the closing documents and give the money to the appropriate people so you can finally own your home. Although, the loan process building up to that takes time also.
                 While filling out your loan application, or Uniform Residential Loan Application, your loan officer should help you. There are ten sections in the app that you will be asked to complete. The first is the type of mortgage and terms of loan section. This helps to specify the maximum amount of money you want to spend and the type of loan you are looking for. Then, comes the property information and purpose of loan section. Here you will provide information about the property that you have selected, if you have done so already, and the purpose for the loan that you seek. The third section is the borrower information. You will provide personal information about yourself and your co- borrower (if you have one). Here is when you will need your credit report. Your loan officer will then ask you for you employment information for the next section. You will need to give all of your employment information from the last two years. Following that, you will issue them your monthly income and combined housing expense information. This includes your monthly salary, your monthly expenses, your recent pay stubs, and your W-2 income tax forms from the last two years. The sixth section covers your assets and liabilities. This calculates your net worth from all of your assets you own and your current bills. The seventh section, the details of the transaction, your loan officer will fill out. The next one you do will be the declarations section. You will state any pending legal problems or other factors that might affect you getting this loan, and you will affirm that you are a US citizen or permanent resident alien. Then, you will fill out the acknowledgment and agreement section. This is where you are agreeing that all the information that you have provided is correct. The last section is the information for the government monitoring purposes. You provide your ethnic origin and race so the government can make sure the housing market meets the needs of every racial and ethnic group. Once you have completed all ten sections of this application, your loan officer will send it to their organization to get the approval. If it is approved, you should get a pre-approval letter.

            Once the loan application is done, you will receive some more documents outlining the costs associated with your loan. The first is the Good Faith Estimate document. This is an estimate of the mortgage loan terms and charges that you will be getting. Some of the charges could be the appraisal fee, credit report fee, title services fee and title insurance, government recording charges, homeowner’s insurance, or an initial deposit for an escrow account if you choose to obtain one. An escrow account is the amount that you will pay in advance and is usually enough to cover what it would take to make two or three mortgage payments. You will then get a Truth-in-Lending Disclosure Statement. This shows the total cost of your mortgage including the amount being financed, the annual percentage rate (APR), finance charges, and the payment schedule. Following that will be a Commitment Letter. You will get this letter after you loan is approved and it will explain all parts of the loan you are receiving. You will need to sign this and return it within five to ten days. After that is the Appraisal Disclosure. This states that you have the right to get a copy of the appraisal report. Finally, you will get a HUD-1 Settlement Statement. This discloses the actual amount you will pay for all the fees and services and it also includes the date and time of your closing, which is also another process.
          The closing process involves all of the parties signing the documents and legally giving the property to you. The people that will be there are you and your co-borrower (if applicable), your escrow officer, the closing agent, the seller’s real estate agent, and your real estate agent. The documents you will need to sign will be the mortgage note, the mortgage deed of trust, the deed, and the affidavits and declarations. All of these will ensure that the property is now yours. After you have completed all of this, you will finally be done with the mortgage process and have the home of your dreams.  

Perkins Lending Team