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Simplified view of the mortgage process.

By David Width Jr.

Real Estate Agent

January 21, 2009 06:57 AM

I wanted to give customers one of the most simplified views of the mortgage process, so here it goes.

1. Finding the home of your dreams.
Do some shopping to different lenders to find the best terms and rates for yourself. Ask your Realtor for some suggestions if you do not know of any lenders off hand. Before you go out to shop for homes, you need to meet with a lender to find out how much you can get qualified for. You don't want to find a home out of your price range and fall in love with it because it will make it hard for other homes to measure up.

2. Formal Application
Meet with your loan officer, and at this time have an idea of how much you can comfortably afford monthly. Most applications can be taken by phone, mail, or the internet.

3. Pre-approved
Once you are pre-approved, your file goes to underwriting for review. The underwriter may ask for additional documents or information before making a final decision.

4. Processing
All the documents you have given to your lender now go through processing. They normally send out verifications of your assests and employment, which are completed and returned.

5. Approval
Once your loan is approved, your loan officer will now issue a formal mortgage committment. Your committment letter will give you all the instructions you need to prepare for closing. You should be assigned a closing cooridnator, who will corridnate with you, your Realtor, and closing agent for a smooth settlement.

6. Closing day
It's finally here, Settlement Day! Buying a home can be hard work, but with committed professionals working for you, it should make the home buying process easy and hassle free. Sign the documents, take the keys to your new home and celebrate. You deserve it!

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Gerry Khatchikian

Red Lodge, MT

ASA, TRC, SFR

David,

Good post! Very well explained and easy for customers to understand.

Jan 21, 2009 09:28 AM

R.E. Renée Hoover, Salesperson

Century 21 Geba Realty, Milford, PA; Licensed in PA & NYS - Milford, PA

Poconos, Pike, Wayne, Monroe Counties, PA; PA/NYS

David, can you suggest what a consumer should do prior to making the first call to help enhance their viability - getting their affairs in order. Good post. Thank you.

Jan 22, 2009 03:00 AM

David Width Jr.

Little Egg Harbor, NJ

In that first phone call with the mortgage rep., a buyer will most likely set up a face to face appointment with this rep. At this time the rep will inform them of things they should be bringing to this appointment such as; 2 yrs. tax returns, 2 yrs. W-2, a couple recent pay stubs, bank statement, etc. They may ask for more, and the more you bring them the quicker they can get the process rolling. Does that kind of answer your questions Rene?

Jan 22, 2009 03:18 AM

The Rains Team

Keller Williams Realty Atlanta Partners - Hoschton, GA

A higher standard in real estate

Hi David: Great post; this will certainly help a buyer understand the steps from start to finish. The only thing I would like to add, is that it's a great idea to talk to loan officers and get pre-qualified before going out to see homes. It's certainly a disappointment to find your dream home and then realize that you can't afford it. Getting pre-qualified first will help eliminate disappointment because your Realtor will only show you homes in your price range.

Have a great day,

Anne Rains

Jan 22, 2009 04:14 AM

David, yes it does; also the buyer needs to take a good look at their financial situation and take whatever actions necessary to make it a positive situation. The pre-qual suggested by Anne Rains, in my book, is an absolute must. I think it shows professional courtesy to the seller and to the seller's agent to only bring qualified purchasers to the property. An agent, I believe, should start qualifying a person right from the beginning. This is a good discussion, not only for the novice, but to reinforce the basics.

Jan 22, 2009 05:15 AM

Thank you for catching my mistake. You should always have your buyers pre-approved before showing them properties for the reason Anne touched on. You don't want to show buyers a house they fall in love with that they can't afford because if they don't qualify for the amount needed it will be hard for the buyer to find a house that measures up to the house they origianally fell in love with. I apoligze for that error.

Jan 22, 2009 07:47 AM

Karl Peidl

Moorestown, NJ

Accredited Loan Consultant

As a mortgage professional, I'd like to add a few comments...

David - I might suggest this post be called "An Over-Simplified View of the Mortgage Process". The mortgage process is much more in depth than you make it seem, and we are constantly seeing guideline changes that add to the complexity.

I would not have used the words "final decision" at step #3. I believe that would be better suited for #5 when the mortgage commitment is issued. Steps #3 and #4 would be flipped in my company in that most of the processing takes place prior to the file going before an underwriter.

Anne mentions getting pre-qualified before looking at homes and David responds by stating you should always have your buyers pre-approved. There is a huge difference between pre-qualification and pre-approval. I've done several posts on this subject in the past and invite you to check out my blogs to learn the difference.

Overall though, a good basic explanation of how it works.

Jan 22, 2009 08:54 AM

Simplified view of the mortgage process.

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David Width Jr.

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