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Easy-to-follow steps before mortgage closing

Posted on: 26th Mar, 2004 05:20 am
To own your dream home, you may have to take out a mortgage loan. Though apparently looks so easy, but the mortgage loan process is not very simple. From loan origination to the closing, the entire loan process involves few complicated steps. These steps have been explained below in a simple way.

4 steps involved in mortgage loan process

  • Processing:
    The lender collects all the information required to process your loan and initiates a credit check. If the property does not qualify for an automated valuation or drive-by assessment, the lender arranges for an appraisal of the property to determine the fair market value of the property.

    You will have the option to lock in your interest rate or let it float. The lender also checks the title to the property to make sure there are no outstanding liens or title problems. The lender may require lender's title insurance policy while you may require owner's title insurance policy.

  • Decision:
    Once your credit check, appraisals and verifications are complete, an underwriter reviews it. Underwriters are trained to evaluate your financing requirements and will do everything possible to help approve your application. If your loan is approved, your lender will issue you a loan commitment to lend you the money.

    The commitment explains all the details of the loan including all charges and fees, closing requirements, and explains, conditions required prior to or at closing, information on when the commitment expires; and important information you should know when closing on the home. It also states certain conditions that must be met before the loan is granted, for example, bills you must pay off, requirements of the homeowners association, etc. You should go through the commitment thoroughly to make sure that you are acceptable to all the terms of the loan.

  • Pre-Closing:
    Prior to closing, your lender may ask you to provide insurance and real estate related documents. You will be notified of the exact amount of money and any additional documents you may need at the closing. In the case of new construction, the lender will want the appraiser to inspect the home just prior to closing. This is to ensure that the builder or contractor in accordance with the plans and specifications, furnishes it.

  • Closing:
    A closing agent, an attorney or title agency representative, coordinates and distributes all the paperwork and funds, according to the terms agreed upon by you and the seller. At your closing, ownership interest of the property is transferred to you.

  • Related Readings
    Closing cost: Different costs that a home buyer has to pay
someone told me that, if you are married and want to buy a house in Florida, both husband and wife must sign for ownership and/or mortgage. Is this true? Thanks.
Posted on: 05th Mar, 2010 11:43 am
As far as I know, it's not mandatory for both the spouses to be on the property and the mortgage. Florida is an "equitable distribution" state. Both the spouses can hold their own property separately.
Posted on: 08th Mar, 2010 01:49 am
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