In pre-qualification, we gather information about your income and debts, and make a financial determination about how much house you may be able to afford or if you have sufficient equity (under temporary HASP bill even negative equity can be OK’d) in your present home to refinance. The application page is where you send us your pre-qualification information and authorize us to pull credit reports.
Different loan programs have different requirements, so be sure to let us know of each type of program you are interested in. Use the “Goals” section of the application.
You’ll hear back from us typically within one business day with information on the loan program(s) you qualify for. At this point you decide which program you’re interested in and we start processing your 1003 application. If you fail to qualify for a loan we’ll let you know why and what action you can take to help you qualify in the future.
If you’re not happy with the programs we offer, your process ends here and you’ve invested nothing but a little bit of time.
The 1003 application is actually the beginning of the loan process. At this juncture the applicant is now referred to as a “borrower,” completes a mortgage application with the loan officer over the telephone or online and supplies all of the required documentation for processing. Various fees and down payments are discussed at this time and you will receive a Good Faith Estimate (GFE) and a Truth-In-Lending statement (TIL) within three days, which itemizes the rates and associated costs for obtaining your loan. These will be sent to you via email as PDF attachments. Make sure you have a copy of Acrobat Reader from Adobe so you can view and print these files. We have a download link at our site if you have trouble finding Acrobat Reader on the Internet.
Opening the File
At this time we order the property appraisal, this is your only out-of-pocket expense during the loan process (this only applies to loans where an appraisal is required). Appraisals vary in price by your property location but because we are required to use an “AMC” appraisal management company, they tack on between $150-$200 per appraisal for providing almost nothing and this poor decision has increased the cost of an appraisal to appx $550.
Your finished 1003 application will go directly to our Fannie Mae Direct Underwriting software, we will have approval status and a condition list to satisfy your loan approval typically within a few hours. Your loan officer will contact you with your approval status and a list of documentation needed to satisfy the underwriting conditions.
The “processor” reviews the credit reports and verifies your debts and payment histories as the VODs and VOEs are returned. If there are unacceptable late payments, collections for judgment, etc., a written explanation is required from you. The processor also reviews the appraisal and survey (if required) and checks for property issues that may require further discernment. The processor’s job is to put together an entire package that may be underwritten by us.
The underwriter is responsible for determining whether the combined package passed over by the processor is deemed as an acceptable loan. If more information is needed, the loan is put into “suspense” and you are contacted to supply more documentation.
Mortgage insurance (PMI) underwriting
PMI occurs when you have less than 20% of the loan amount to put towards a down payment or you want to refinance more than 80% of the appraised value of your home. At this time, the loan is submitted to a private mortgage guaranty insurer, who provides extra insurance to the lender in case of default. As above, if more information is needed the loan goes into suspense. Otherwise it is usually returned back to us within 48 hours (due to overwhelming volumes these times vary and can be over 7 days depending on loan type).
During this time the entire loan is checked through an intensive quality control process to ensure the loan does not contain any errors or deficiencies. Once QC has completed their review to ensure compliance with all government rules and regulations it then transfers to closing to complete the loan.
The closing will normally take place at title. If you are unable to get to a local branch office then an alternative closing location can be chosen. At the closing, if it is a purchase, the loan ”funds” either with a bank wire or with a cashier’s check, title will distribute to the selling party in exchange for the clear title to the property. If you are refinancing your current home, you have a three-day recision period to change your mind. After that your loan is funded and you receive any money coming to you. This is the point at which you finish the loan process and actually buy the house or complete the refinance.