LOAN PROCESS
Prequalification Vs. Preapproval
Pre-Qualification
This is typically just based on a conversation about your credit, income and assets. Sometimes it’s even done without pulling a credit report. It is a preliminary approval subject to the verification of your credit, source and amount of income and assets. A pre-qualification letter is the very minimal that you can get to provide to a seller to which you want to make an offer. At Sterling Mortgage we highly recommend trying to not use this and to proceed to the pre-approval step. This can save you a lot of heartache in getting your hopes up on something that isn’t going to work out.
This can actually be done while you are at a home that you have found via our Sterling Mortgage Mobile App. It is available either at Google Play or I Tunes app stores or follow this link http://mtgpro.co/qt32z
Pre-Approval
For this we will take a full loan application for you and process your file upfront to ensure financing.
The pre-approval process includes:
- Gathering and reviewing all the documents needed for your file.
- Evaluating your credit
- Verifying your employment and assets
- Submitting your file to underwriting
- Identify and address potential issues and challenges
- Allows everyone time to explore the right loan for you and gives you time to review all the numbers and terms.
- Give us the opportunity of providing you with a fully underwritten and credit approved file.
From the seller’s perspective, an offer with a pre-approval is significantly stronger than one with just a pre-qualification letter and will strengthen your offer.
The Loan Process
The Loan Application
It all starts with you providing the information for your loan application. Depending on what works best for you, this can be accomplished by completing it online or live with one of our loan officers. Once we have your general information , then it’s time to discuss your specific situation and goals. We will go over the different loan programs and which one works for your overall financial situation.
Your Documentation
Next step is to gather your paperwork in order to document everything that is on your application. Please refer to our separate documentation list for a detailed list of what we will need. This portion of the process can be a little daunting. As a result of the mortgage crisis, many layers of fact checking have been added to the mortgage process by regulators and the national authorities who finance the majority of mortgage loans………Fannie Mae, Freddie Mac, FHA, VA and USDA.
Pre-Approval Issued
At this stage, your Loan Officer will have reviewed your application and documentation. They will have run your credit, analyzed your income and employment, reviewed your assets for cash needed and run your automated underwriting for approval.
We are now able to provide you with your pre-approval letter and worksheet with your estimated house payment and closing costs so that you can begin your home search with confidence! Getting to this stage makes your offer on a home much stronger than if you haven’t done anything.
It is very important for the everyone is the transaction to be as educated as possible and understand the reasons behind what we are asking for to help relieve the potential frustration.
It is a team effort to make all this happen!
It's Time to Shop for Your Home
Now You Have Found Your Dream Home . . .
How exciting!! There are so many things to work on for the specific home that you will be happy that you already done the majority of your paperwork for the loan.
We will now update your file to be a “real deal”.
We will update your loan application to reflect the terms of the accepted purchase contract. We will get your actual fees from the Title company and prepare your disclosures for you to sign, either via Esigning or in person.
We will order your appraisal.
Because it may have been a while since we got your original paperwork, we may need to update things a bit. We will need a home owner insurance quote from you as well. We will re-verify employment.
Now we wait for you to complete your inspections and for the appraisal. Then, the file will be sent back to underwriting for them to review the appraisal and all the updated information. At this point they will run a “Fraud Guard” report. The report can run about 25 pages or more and reviews everything and everyone involved to ensure no party engaged in the sale has been involved in fraudulent activity in the past.
This includes:
- *The borrower and their background
- *Appraiser
- *The property and real estate professionals
At this time any one of those reports may spur a request for additional documentation from the borrower.
After the underwriting final approval we are in the home stretch……but there are a several more steps.
1. Our file goes thru the final compliancy check.
2. You will need to sign your Closing Disclosure…this is very important. It has you verify the fees charged and you then have to wait 3 days before you can sign your Loan Package.
3. We will do a “soft pull” of your credit to insure that no new debt has been obtained.
Signing of your Loan Package
Finally, It’s time to sign!
You will go to the Title company and sign your loan package. You will be notarized, so you need to bring your photo id. You will also be bringing the funds needed to close at this time, in the form of a Cashier’s Check or a wire from your bank.
Just a couple days to go before the home is yours.
Once you sign, Title will upload your package to the lender for review and overnight the original package. Once the funder has reviewed your file, we will let you know if there is anything else we need. Typically most items are done by your Lender of Title.
Once the funder has all the items we will fund your loan and send the money to Title. When they get it, they will record the new deed with the County and THE HOME IS YOURS!
After the closing- your loan is re-reviewed internally and by the end investor and that time we occasionally need your assistance in additional documentation.
The mortgage process is complicated and can be intrusive and there are many times throughout the process when a borrower could be asked to produce more and more information. That is because some items that we get uncover additional items needed. This can be very frustrating and annoying. Please know that we always do our best to keep all of this as limited as possible and are here to help.