The Mortgage Process
A mortgage is a loan associated with a piece of real estate where the property being purchased acts like collateral for the loan. This means that the property purchased is itself the security for the loan and can be acquired and sold by the lender if the borrower fails to make the agreed upon payments. This use of physical collateral is a big reason why the interest rates for mortgages are lower than that for items like credit cards.
It’s also why securing a mortgage is such a complicated and sensitive issue that requires an expert hand to guide you through the process and ensure you are agreeing to a loan you can afford to repay at the best terms possible. When considering a mortgage, it is key to have an expert team in your corner. This team, made up of a loan officer, real estate agent, and title company, can make all the difference in your experience and result when purchasing a home.
The Role of Your Loan Officer
Your loan officer will serve as your guide through the process of securing a mortgage with which to purchase your dream home.
Our loan officers are the men and women who ensure you are getting the best rate and terms available to you in your situation. They are all licensed and experienced team members with the full support of The Wood Group and Fairway standing behind them to ensure the complicated work happens quickly and professionally each and every time.
Knowing how much you can afford is one of the most important factors in the process of buying a home. As mortgage lenders, it’s our chief concern to ensure you are able to responsibly repay your loan. It’s often best to begin the home buying process with an application that will help us assess your qualifications for buying based on things like credit history, gross monthly income, and cash you have on hand for down payment.
There is quite a bit of paperwork involved in this step as we all do our due diligence to ensure that financing issues don’t arise later in this process that will get in the way of securing that dream home. You can make the process pretty simple by downloading the new FairwayNOW app from your favorite app store (iTunes | Google Play) and connecting with your loan officer directly. The app allows you to snap a photo of the documents required for your loan and submit them securely right from home.
Here are some of the items you should start gathering in preparation for your application:
- Copy of photo IDs and/or Social Security cards for all borrowers
- Most recent pay stubs for all borrowers for the last 30 days
- W-2/1099 forms for previous two years for all employment income for all borrowers
- Personal tax returns for the last two years with all schedules included
- Most recent checking, savings, and retirement statements covering the last two months with all pages included
- Written explanation of credit anomalies, including: late payments, credit inquiries, charge-offs, collections, judgements, and/or liens.
Once we’ve had a chance to review your application, we’ll reply with a pre-qualification letter stating how much you are approved to borrow. These letters come in very handy when shopping for or negotiating on a home against other buyers. Now, it’s time to shop!
Once you select a home and enter into a contract with the help of a realtor, your loan officer will begin work again to complete the actual loan file for your purchase. This requires more time-sensitive paperwork, and we ask that you help us execute quickly on your loan by responding in a timely manner to requests for additional documentation. FairwayNOW (iTunes | Google Play) is a great way to submit documents securely and quickly. These additional documents might include:
- Purchase agreement and a copy of your cleared earnest money check (front and back)
- Contact information for your homeowners insurance
- Contact information for a homeowners association if applicable
- Written explanation of credit anomalies that might have come up since your initial application
- Copy of the survey
- Legal documents explaining previous bankruptcies or changes in marital status
Your loan officer will communicate with you every step of the way by phone and email to ensure you know exactly where we are in the process and what to expect next. Here are a few of those steps:
Your loan officer will submit the prepared file to a processor who reviews the file for any errors and orders an appraisal. Depending on your situation, the processor may request additional documentation before passing the file to underwriting.
Your file will be reviewed by an underwriter to ensure that it meets all the specific requirements for the loan program being considered and issues a loan decision. Once your mortgage has been approved with all conditions cleared, your loan is considered “clear to close.” You’ll receive a loan commitment letter with the details of your mortgage and any outstanding conditions to be resolved before closing.
At closing, you sign a variety of final documents to fully execute the mortgage. Be sure to bring a photo ID along with the proper form of payment for closing costs. Once all documents are signed, funds will be disbursed, and then you receive the keys to your new home!
The Role of Your Realtor
Your realtor will help you select a home and negotiate the terms of the contract. They work side-by-side with our dedicated team of loan officers. If you don’t currently have a realtor in mind, use the contact us form on this page or call your loan officer to let us point you in the right direction.
Once you have entered into a contract on a piece of real estate, the realtor will send us a copy of the contract, assist you in locating homeowners insurance or a home warranty, work with the title company to ensure a clean title, and answer any questions you have about the property as your loan is in process.
The Role of Your Title Company
The title company helps ensure that the property included in your deal has a clean and legitimate title that can be transferred to you as part of the purchase. They will also issue a title insurance policy for your purchase that helps protect you and the lender from claims in case there is dispute over the process.
They also oversee your escrow account to ensure the proper money is available for closing and will often guide you through the formal closing process at their office.
Because of the nature of their work, your title company representative should be someone attentive to detail and fully experienced in the industry. As with realtors, our loan officers are happy to help you locate a trustworthy title company in your market. Simply use the contact form on this page to request more info.