The Mortgage and Loan Process
1. Financial pre-approval
- Application and interview
- Buyer provides pertinent documentation, including verification of employment
- Credit report is requested
- Appraisal scheduled for current home owned, if any
- Loan package is submitted to underwriter for approval
3. Loan approval
- Parties are notified of approval
- Loan documents are completed and sent to title
4. Title company
- Title exam, insurance and title survey conducted
- Borrowers come in for final signatures
- Lender reviews the loan package
- Funds are transferred by wire
Should I get pre-approved?
Yes. We recommend our buyers get pre-approved before beginning their home search. With pre-approval, you will receive a conditional commitment in writing for an exact loan amount, allowing you to look for a home at or below that price level. Getting pre-qualified is a good first step, but you need to get pre-approved, because when you make an offer, it won’t be contingent on obtaining financing, which can save you valuable time.
In order to expedite the paperwork process for pre-approval, start gathering the following items:
- Most recent paystubs for one month.
- W2s from the last two years.
- Signed copies of your last two years’ tax returns, including all schedules that were filed.
- Homeowner’s insurance company name and number.
- Most recent bank statements for two months.
- Most recent statements from any retirement and investment accounts for two months.
- CA Driver’s License
- Social Security Card
What costs are involved?
Within 3 days of your application, your Loan Officer must provide you with a good faith estimate of closing costs. Along with any down payment, you will have to pay closing costs at your closing as well. This is a brief rundown of some of the fees that could be associated with your new mortgage:
- Application/Processing Fee – Charged by the loan officer to process your loan application.
- Appraisal Fee – Charged by the appraiser to determine the current value of the property.
- Closing Fee – Charged by the closing agency (escrow, attorney, title) to ensure the close of your transaction.
- Credit Report Fee – Charged by the credit reporting agency to provide your credit report to your loan officer and/or lender.
- Title Search/Title Insurance Fees – Charged by the title company to ensure the property is free from liens or title defects.
- Origination Fee – Paid to the originator to obtain a lower interest rate. This is usually expressed in the form of points. One point equals 1% of the loan amount.
- Discount Points – Paid to the lender to secure a lower interest rate.
- Miscellaneous Fees – VA and FHA loans may have other fees associated with them. Private Mortgage Insurance (PMI), document preparation, notary, recording and tax service are other fees which may fall under this category.
If you have questions about costs associated with financing your home purchase, I will be happy to introduce you to one of my preferred lenders who are experts in the field and will evaluate your unique financial situation.
Steps in the Home Buying Process
Step 1: Fund Your Home Purchase