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Understanding the Loan Process |
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What’s Going To Happen When I Make My Loan Request (Application)? The Loan Application |
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One of the most consistent comments from folks purchasing or refinancing their home is a sense of frustration about the loan procedure. There's not a lot of logic or common sense involved in obtaining financing for your home. It's very tedious and process oriented. There are many quasi-governmental agencies and regulatory bodies acting as watchdog to the mortgage industry. For a brief time, you will be a victim of these regulators to the extent that your application for financing must comply with extensive rules and guidelines as established by these agencies. As consumers, we all benefit from these rules, guidelines and stringent compliance requirements through great rates on long term interest rates. The downside is that it is a journey for you into an area ... a process ... a procedure about which you have little if any experience, insight or understanding. You've searched for your new home and now you've found it and strategically negotiated your purchase. Financing is a key component supporting this purchase. Theoretically, all you should care about is the end result - an approved loan which funds on time. At Nations Home Funding, we believe that a fundamental understanding of the process and systems involved in getting your home loan will mitigate your apprehension about financing your new home. |
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If you select Nations Home Funding as your lender, the odds are that your Home Loan Specialist will have not only the knowledge but the know how to get the best results for you. That’s because most of our Home Loan Specialist have been actively involved in home lending industry for many years. In fact, Nations Home Funding rarely hires anyone who doesn’t have years of practical experience in home lending. We rarely have any turnover in our Home Loan Specialist. Most banks and mortgage companies tend to be a revolving door and their staff of loan officers change very frequently. Our Home Loan Specialist choose to stay at Nations Home Funding because they enjoy helping folks to buy their new home or improve the quality of their lives by restructuring their biggest financial obligation through refinancing. During the loan application, your Home Loan Specialist will take as much time as you want to thoroughly review all of the options from our extensive network of wholesale lenders. A detailed analysis of your closing expenses will be thoroughly reviewed and your loan consultant will offer suggestions as to how you might save some cash at closing. After thoroughly reviewing financing options and programs, your Home Loan Specialist will assist you by gathering information necessary to complete your loan request. You will also sign several other documents, which clearly stipulate all of the facts concerning your loan. Your Home Loan Specialist will guide you through the application by asking questions about your financial situation. As anyone who has ever been audited by the IRS can tell you, "… there’s a right way to complete a form, and there’s a wrong way!" Spending time with your Home Loan Specialist and being completely honest with him or her will save you time and aggravation in the future. At the conclusion of your loan application, your Nations Home Funding Home Loan Specialist will be able to let you know of any concerns, which might need clarification or additional documentation. There are a number of items that you should bring to your application. Bringing these items will significantly reduce the time you have to wait for your approval. (Click Here for Link To Needs List). |
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Most folks report that they always feel pretty good after meeting with their Home Loan Specialist. The next thing that happens is what we in the Mortgage Business call Processing because we are confirming (or verifying) all of the information you provided your Home Loan Specialist at the time of application. If you’ve ever obtained a home loan before, this is that time where you feel like nothing is happening. In point of fact, a great deal is going on behind the scenes. An appraisal is ordered for the home you are buying or refinancing. The appraiser is independently employed as an outside vendor. Appraisers are licensed and must have exceptional knowledge of the local market as well as any other factors, which might influence the market value of your property. The appraiser’s report must comply with rigorous guidelines, which are issued by a wide assortment of banks and mortgage lenders. Remember that the property as well as the borrower must comply with the lender’s guidelines. Your credit report is ordered. This credit report is very different from the type of credit report a salesman might obtain when you go to buy a car. To begin with, it takes 3 to 4 days for the credit report to be completed! One reason that it takes so long to get your credit report is that the guidelines stipulate that we must show where you have lived over the past 24 months as well as how well you have paid your landlord. Most home mortgage lenders stipulate that credit data must come from all three reporting agencies (Equifax, TRW, and Transunion). Supporting documentation from independent parties must be obtained to evidence the income and employment stability that has been written on the loan application. This proof is usually obtained by sending out forms that must be completed by your employer. We must have supporting documents from your employer(s) covering the last 24 months. The final piece of the processing phase relates to obtaining supporting documentation regarding your liquid assets to close on the transaction. Forms are usually sent out to banks or investment companies that hold your assets. As you can imagine, it usually takes a few days to get these forms back and they must be accurately completed. Now maybe you have some appreciation as to why it takes so long to get your loan request approved! But wait a minute – there are some steps you can take to help speed this process along. Some information that you can provide and that puts you more in control of the process. Remember that List? (Click Here) After all of this information is obtained, the loan manager will stack all of the paperwork together and submit your loan request for final approval. The loan approval is known as ... |
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Underwriters (please don’t confuse with Under-takers) are responsible for carefully reviewing your loan request to make certain that it complies with all of the guidelines their institution has created. In our experience in dealing with over 48 different lenders throughout the Country, most lenders adhere to some fairly basic – yet detailed – guidelines that are issued by governmental or quasi-governmental agencies. You will here us Mortgage People begin to drift into mortgage-eese as we begin to mention "Fannie Mae", or "Freddie Mac", or "FHA", or "VA". These are the agencies, which have created and enforce the guidelines lenders must follow in approving home loans. The underwriter will review your file to assure that all of the documents support the obvious belief that you will make all of your house payments in a timely manner. It usually takes a couple of days for the underwriter to finish their review. You should also be aware of the fact that it is very typical for an underwriter to approve a loan request subject to their review of additional information. Don’t worry … it’s usually pretty minor stuff. |
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This is the moment we’ve all been waiting for! Now you will reap the rewards of all of your hard work. Once your loan request has been approved, the loan documents (ominously known as "the package") will be prepared by the lender. You will select an Attorney or Title Company. Your Attorney/Title Company will search the quality of title to assure that there are no outstanding judgments or liens. Your Attorney/Title Company will order the survey of the property. Your Attorney/Title Company will also obtain title insurance to protect your and the lender in the event that there might be any defects of title which might not be recorded at the courthouse. The final function of your Attorney/Title Company is that her or she will prepare the final closing figures. In addition, the Attorney/Title Company is responsible for writing checks to all of the different parties at the closing and funding of the transaction. In this regard, you should anticipate that your Attorney/Title Company will require you to bring a certified or official bank check for closing. |
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