In your journey to become a homeowner, you’ll encounter several mortgage and real estate professionals whose responsibilities range from verifying your income history to discussing your financing options to conducting an appraisal on your potential dream home. Let’s go through the mortgage process in terms of who you’ll meet.
The first person you’ll encounter is a Mortgage Loan Originator, which is the person who can help you find the right financing options. There are many loan programs that have differing features and terms (zero down payment loans, veterans/military personnel home loans, fixed vs. adjustable rate), so you want to get an expert’s opinion on what will work for your specific home financing goals and your budget.
Once you decide on an option, you’ll submit an application and your Mortgage Loan Originator will work with other members of their team to ensure your loan moves efficiently towards closing.
Now that your application has been submitted, the formal review process starts and your point of contact will be your Loan Processor. This person will compile all incoming documentation from you and will contact you if anything you submit is incorrect or missing.
Once the Loan Processor has all documentation necessary, s/he will submit your application file to the Underwriter, who formally reviews your file. The Underwriter and Loan Processor will sometimes go back and forth on certain details about your information, at which time you may be asked to submit more documents.
Either before, during, or after you’ve submitted your loan application, you will want to connect with a Real Estate Agent who will listen to what features you’re looking for in a home and help you search within your price range. This agent can also facilitate negotiations over price, execute the purchase contract, stipulate for repairs if necessary, arrange access for inspectors, and much more if problems arise.
While your application is under review, you may find a house you want to put in a bid for. In that case, you’ll need an Appraiser, an independent third party who determines the precise value of the property. This involves accounting for any repairs that need to be made that may detract from the value; any recent renovations that may add to the value since last appraised; and the value of comparable homes in the area that have recently sold. This amount will be factored in to the final terms of your mortgage loan.
If your bid is accepted by the seller and your application is approved, you’ll move towards closing on the house. Prior to closing, a Title Agent will research to ensure that no other person can claim rights to the property. The Title Agent also provides insurance against losses in the event that it is determined in the future that there is another rightful owner to the property.
Your Closing Agent handles the final phase of your financing, referred to as the closing. This agent ensures that all documents in your loan and in the closing of the house are correctly executed and that all parties involved fully understand the details of the transaction. Your Closing Agent then records the transaction in county records and handles the proper channeling of funds.
- Have questions? Call (800) 634-8616 to speak with one of mortgage professionals!
- Move on to our next lesson, Mortgage Servicing Explained.