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Income, Assets, Real Estate Owned (REO), Valuation, Title, and Credit.  See, The Short List. Not all documents will be required and we may ask for additional items. You must have the basics ready to make application. Information from your documents is on the ‘1003 Loan Application’.  Accuracy in the beginning eliminates explaining and paperwork later on.  

The Short List: 

Once we have a complete 1003 Loan Application we will run your file through ‘automated underwriting’ and issue the initial disclosures including the Loan Estimate or ‘LE’. Electronic delivery of disclosures is the preferred method. It really speeds up the process and saves paper. We have a variety of different systems in place for electronic disclosures and will provide instructions when the time comes. After disclosures are acknowledged as received, we will proceed with sending the application package and additional disclosures. If you prefer not to use electronic delivery, we can use fax, mail, personal appointment, pony express or carrier pigeons. Whatever it takes! (Our standard practice is not to charge an upfront credit report or application fee)

Your Mortgage Loan Originator (MLO) will begin processing your loan once the information to order the Property Appraisal is received. The appraisal, title and other services will be ordered on your behalf. We will require you to submit income and asset information as applicable to your loan, prior to submitting your loan package to our Underwriting Department. Your MLO may gather additional documentation during the loan process, as required to fully approve your loan.

When an Automated Underwriting System (AUS) issues an “Approved” decision, and you have received an acceptance to your purchase offer from the seller (if applicable), and the Loan Estimate (LE) has been acknowledged as received, then you are eligible to lock the interest rate via phone/email with the assistance of your Mortgage Loan Originator (MLO).

There are different rate lock period options, such as 30 or 45 days. For refinances the lock period is typically 30 days.  Shorter locks have better pricing but more upfront preparation is required. Once we lock, the clock starts ticking, and closing before lock expiration is critical. Broken locks or lock extensions can increase pricing. Our standard practice is to order the appraisal at the time of rate lock and this will be an out of pocket cost for you.  With low or no cost scenarios you receive the credits for the appraisal through escrow at close.

If your loan does not receive an “Approved” decision, your MLO will contact you to discuss other options. If after 30 days you have not locked in a rate, we will close your application.

The appraisal fee can vary depending on the value, size, and occupancy of your home. It is paid for by you, usually at time of rate lock. Your home must be in good working order to avoid delays and re-inspections.  Examples of potential issues are open drywall, missing fixtures or appliances, broken windows or empty pools.  Sometimes, room additions without proper permits can be an issue.  Guidelines vary on the issue. Each situation is unique and to avoid ‘surprises’ should be disclosed and discussed with your MLO so an appropriate course of action can be charted.

The Underwriter will review all loan documentation and request additional items needed to get your file to ‘docs’. One of our specialties is the building of complete loan packages.  Our experience allows us to anticipate potential issues that an underwriter may find with your package. Our goal and typically practice is to send the underwriter a ‘tight’ file.  With proper upfront review and appropriate documentation, there will be minimal additional items needed. However, there are a litany of unusual discrepancies that can occur. Issues with credit data, IRS data, title data and various documents are just a few. Your MLO needs to be an expert in resolving these kinds of things or the process can stall out.   Knowing what is necessary and what is not necessary is key to streamlining the process.  We aim to get by with the minimal amount required documents at all times.

Closing Disclosure & Acknowledgment

The lender will issue the CD once the Doc Order process has been completed.  The CD must be acknowledged by the borrower before the documents can be signed.  This can be done electronically (if the borrower opted-in to receive e-disclosures) or by a paper version.

The loan documents are sent to the notary/closing agent for your execution. Once received, the closing agent will need to get in contact with you to schedule a time to sign loan documents. After the loan documents have been executed, they will be returned to the lender by the closing agent.

After review and approval of your signed loan documents, the lender will wire funds to the title company, who will disburse the funds and record the necessary paperwork with the appropriate county. At this point, your loan is considered closed.