September is National Mortgage Professionals Month*
You may be buying a home for the first time, or it has been a while since you have gone through the experience. Either way, you may not be completely clear on the current home-buying process, so let us set the correct expectations and transparency for the home buying process and lower the stress it may cause!
If you are still in the home search phase, be sure you are prequalified with a mortgage lender. Once you have found your property and are under contract, that prequalification turns into an application and the home-buying process truly begins. With a property specific application in hand, your lender will send you the initial disclosures with an estimate of your closing costs, your monthly payment for the loan, and your basic loan features.
“Rate locks” may be handled differently depending on the institution and product selected. For example, residential consumer mortgages serviced by NDBT would include a 90-day rate lock at the point of disclosure. For a secondary market loan (sold to an investor for servicing), such as a 30-year fixed rate loan, rate locks would be executed once the signed disclosures and the customer’s rate lock authorization for a specific rate are secured (secondary market rates change more frequently due to market conditions out of NDBT’s control).
Once disclosures and your intent to proceed have been received, the processing phase of your application begins. Any documents required to underwrite the loan, like income and asset information, will be requested at this time, and your appraisal, title work, and survey would be ordered.
Upon collection of all requested documents, the processor will submit the file to the underwriter for a final loan decision. As soon as a final credit decision has been made, your lender will review the loan decision with you and discuss any remaining items or third-party services (e.g., title work or survey) needed before moving the file to the closing team.
A closing date and time would then be selected, unless already determined within your purchase contract, and your Closing Disclosure, detailing your final closing costs and loan terms, would be provided to complete the mortgage loan process.
After signing all documents at closing and paying closing costs, you are a homeowner. Congratulations!
*This is part two of a two-part series on the home buying process created by NDBT mortgage professionals.
