Mortgage Process -
An Overview of the Loan Process

• Income and debt
• Credit report
• Determination of the best loan program based on your information
• Prequalification, pre-approval and/or conditional approvals

• Prequalification is an informal way to see how much you may be eligible to borrow. You can be 'prequalified' over the phone with no paperwork by telling a lender your income, your long-term debts, and how large a down payment you can afford. Without any obligation, this helps you arrive at a ballpark figure of the amount you may have available to spend on a house.
  
  
• Pre-approval is a lender's actual commitment to lend to you. It involves assembling your financial records and performing a preliminary approval process. Pre-approval gives you a definite idea of what you can afford and shows sellers that you are serious about buying.

• Quote includes a specific program, term, rate, origination/discount points paid, estimate of loan closing costs and prepaid items.

• Loan closing costs- non recurring closing costs- appraisals, credit fees, underwriting, doc prep, title insurance, recording fees, courier, etc.
• Prepaid items- prepaid interest, hazard or flood insurance, property taxes, mortgage insurance, etc.

• Lock commitment- A loan that has been committed to a specific program, rate, and origination/discount fees for a specific amount of time.  A loan that is floating is not locked and is fluctuating with market rates until locked.

• Good Faith Estimate -Explains in detail total settlement charges associated with the loan, monthly mortgage payment, estimated funds to/from the borrower at closing. 
• Good Faith Estimate Provider Relationship- Disclosure that requires specific use of a company that is affiliated, associated, related, business relationship with your lender.
• Truth in Lending - Explains total interest paid, total payments made, APR, discloses if there are prepayment penalties, late charges, assumption, etc.
• Application -Detailed information about the borrower including income, assets, liabilities, employment and housing information, etc.
• Service Disclosure- Provides information about the lender- How many loans they service (receive mortgage payments) vs. sold to another company for servicing.
• Equal Credit -Prohibits discrimination against credit applicants based on age, sex, race, color, religion, national origin or martial status.
• Credit Authorization -The borrower authorizes a lender to verify employment, assets and credit.
• Mortgage Loan Origination Agreement -Required for mortgage brokers- defines the relationship between the lender, mortgage broker and the borrower.  It also explains how a mortgage broker can be compensated.
• Other Related Mortgage Disclosures -Right to receive an appraisal, occupancy statement, 4506 audit form, ARM or Balloon disclosures, PMI disclosure.

• This is required for the appraisal and credit report order to take place.

• All other loan documents are ordered- appraisal, title, credit report, hazard insurance, flood certification, employment verification, asset verification, computer automated underwriting.

• Written approval of the loan including all closing requirements.

• Final detailed explanation of all fees, purchase price /loan payoff(s), money received or owed at closing.

• Deed of Trust -Filed with the county showing loan amount, vesting, loan number, mortgage terms used, property information, legal information, borrowers rights, lenders rights, notifications, mortgage insurance, etc.
• Promissory Note - loan amount, type of loan, term, payment, late charges, etc.
• 1^st Payment Coupon
• Error Correction Agreement -Borrower agrees to resign a document if it was omitted or mistyped.
• W-9 Tax Interest Reporting Form -Mortgage interest earned on the loan reported on your social security number.
• Truth in Lending - Explains total interest paid, total payments made, APR, discloses if there are prepayment penalties, late charges, assumption, etc.
• Escrow Disclosure - Calendar that shows how taxes, hazard, flood, mortgage insurance are collected and disbursed out of an escrow account.
• Servicing Disclosure - Provides information about the lender - How many loans they service (receive mortgage payments) vs. sold to another company for servicing.
• Other Closing Documents - audit forms, title documents, lien affidavits, right of rescission, etc.

• A federal 3-day Right of Rescission Law applies to refinances of primary residences before funding. After rescission period has ended funds will be disbursed to you.

• Not all loans require an appraisal and survey. 

• You are now a home owner!!