 You've made application for a pre-approval - now what?
1) Processing
Your mortgage broker or mortgage specialist collects the information needed to process your loan. Documentation requirements very depending on the loan program you apply for and your individual financial and credit profile. Should you find a property or your profile require a change in type of loan program, additional documentation may be required. If your property does not qualify for an automated valuation or drive - by assessment, an appraisal will be ordered to determine the fair market value of the property you wish to purchase. You may have the option to "lock" in your interest rate or "float" your interest rate. It is important to discuss these options with your mortgage broker.
2) Decisioning
Many mortgage applications are approved quickly. On occasion, loan applications need further review. Your mortgage broker will evaluate your financial requirements and do everything possible to help approve your application. Your mortgage broker may work with hundreds of lenders / banks each with their own requirements. This is in your best interest, because you may not be approved by one lender, however, you may be easily approved by another.
3) Pre-Closing
Prior to closing, sometimes referred to as "loan Settlement," your mortgage broker will ask for proof of home owners insurance (Risk Insurance) and real estate related documents. When you are ready to schedule your closing date, all involved parties will be contacted to arrange for the closing to take place at a convenient time and location. The closing procedure in Minnesota is rather uniform throughout the state, however, the associated fees vary from title company to title company. You were given an estimate of the "cash to close" needed at closing. This amount will be reevalulated and corrected by your title company. You will receive notification of the exact amount you need in order to close and any additional documents you may need to bring. In the back ground out of sight there are several things happening all at once:
Step 1 Contingency removal: The most common contingencies are inspection and financing. An additional contingency might be the sale of your existing home. These conditions must be removed or waved in writing prior to closing on your new home.
Step 2 Appraisal and title work, required by your lender, to confirm value and ability to sell new home by seller. While the appraisal gives current, as is, value the title work shows the seller actually owns the property and doesn't have any leans, judgments or mortgage hindering the sale.
Step 3 Prepare closing documents (package) is done by the title company, escrow service company or real estate attorneys. These documents will confirm the transaction, prorate the funds, they are waiting the sellers and your signatures.
Step 4 Signing of closing documents by all parties concerned (sellers and buyers). The title agent will ask for two 2 forms of identification and require you sign a document stating you the person buying the property and of legal age and of sound mind.
Step 5 While you are sitting at the closing table, the closer will fax the signed documents to the lender for final review. The mortgage processor or an underwriter will give final approval, funds (money) will be dispersed.
Step 6 Funds disbursed, keys exchanged the deed to your new home is sent to the county for recording. You go to the county assessor's office and have your property classified as your "Homestead".
Step 7 You move in and start to enjoy your new home, congratulations!
5) An added item you should consider
Now is the best time to take your paper work to your county assessor's office and ask them to "Homestead" your property. Do it now, so you won't forget, as this reduces your tax libility next year. Then move in and enjoy home ownership, the "American Dream."
Still have questions? e-mail me: SawIt@DuaneSchroeder.com |