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 Application
To start the loan process, all
we need is an application and a few documents to verify
income and savings or other sources of funds for your
down payment. Once we have a complete application,
it usually takes 7 to 10 business days to get your
loan approved. Our goal is to present the best possible
financial "picture" that we can to the underwriter.
Having many different lenders to choose from also
means we have more flexibility in getting loans approved
at the best terms available.
Soon after the loan application,
you will receive a document called the "Truth-in-Lending"
statement which may be confusing. It will have an
estimate of the yield the lender will make on the
loan for the first year, called the Annual Percentage
Rate (APR), which includes certain closing costs.
This is NOT the interest rate on your loan, so don't
panic when you see it.
Mortgage interest rates change
daily and are affected by economic factors just like
any other commodity. We monitor several sources of
information on market trends; however, the ultimate
decision when to lock your mortgage rate must be yours.
You can choose to "float" the mortgage rate
(i.e., not lock-in the rate) until 3 business days
before the closing. Like the stock market, you should
try to get close to the bottom of a down cycle in
rates, but do not expect to hit the exact bottom.
Title Commitment
The title company (or attorney's
office) where the actual signing of closing documents
will take place is researching the property records
to ensure the home you are buying is free of adverse
liens or judgments against it.
Appraisal
We will select an independent
appraiser to inspect, measure and photograph the
property you have purchased. The appraisal should
not be confused with a property inspection that
you may want to have done outside the loan process.
The appraiser will do a market research on recent
sales of comparable properties to determine its
value. If there are repairs required by the appraiser
or if the value is less than the sales price, you
will be advised immediately. The underwriter reviews
this appraisal as part of the loan decision.
Survey
If an old survey is not available,
or if a new one is required, a survey crew will
be sent to the property to find and mark the boundaries
of the lot. At closing, you will receive copies
of the survey showing the dimensions of the lot,
location of the house and structures of the property,
and easements of record.
Underwriting
Your application will be entered
into our system, income and assets to close verified
and a final credit report done. The complete credit
file, with a summary of income-to-debt ratios and
the appraisal, will go to the underwriter who reviews
the file and makes the final loan decision. If there
are conditions required by the underwriter for loan
approval, you will be notified immediately.
The Timeline
Estimates noted in parenthesis
are business days and assume that all required documents
are received within 48 hours of initial application.
Step 1. Consultation/Application
(1 day)
Overview of loan programs. Estimate settlement costs
and funds required to close. Collect documentation
of income and assets.
Step 2. Set up Loan
File (3-5 days)
Order credit report, property appraisal, title commitment,
survey, and rental or mortgage history. Get homeowners
policy information. Mortgage payoff (if refinancing).
Step 3. Loan Analysis
(2-3 days)
Review documentation, resolve file issues, request
additional information or explanation as needed.
Step 4. Loan Approval
(2-3 days)
Assemble loan package and submit to underwriter.
Clear conditions (if any) required for final loan
approval.
Step 5. Prepare Documents
(1-2 days)
Send instructions and documents to title company.
Prepare Settlement statement (HUD-1) and review
documents.
Step 6. "Celebration
Event" (1 day)
Meet at the title company to sign documents for
home ownership. Disperse funds and get keys to new
home.
The Top 10 Things
That Delay Closing
1. Not providing information requested
in a timely manner.
2. Unclear verification of funds to close, changing
the source of down payment, and using a personal
check, rather than a cashier's check to transfer
"gift" funds.
3. Changing terms, conditions or sales price on
the contract without notifying us immediately. For
example, upgrades to new home construction.
4. Having late payments after the initial pre-qualification
credit report or putting off paying bills in an
effort to accumulate down payment. (Recent late
payments may cause a loan to be declined.)
5. Waiting until the last minute to choose your
homeowner's insurance company.
6. Being out of town on the day of the closing and/or
significant amounts of time during the process.
7. Losing or quitting your job just before closing.
Employment is verbally verified prior to closing.
8. Buying an expensive item during the loan process.
Credit reports are often updated just before closing.
9. Getting married between loan application and
closing and not telling us. (Texas is a community
property state.)
10. Not bringing requested items to closing, such
as cashier's check, photo ID, closing conditions,
etc.
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