The Mortgage Process: Here's How We Do It
Our first conversation will be no more than 15-30 minutes, in which we'll get to know each other better. I’m always curious as to how you heard about me, and extremely grateful for referrals by all of my past clients and my partners.
More importantly, I’ll be doing most of the listening as I find out about you, and the property you either own or are thinking of owning and your timing. I’ll begin to confidentially gather your more detailed income/employment, financial and property information for mortgage financing. By the end of our talk you will have heard some clear, general alternatives available to you, including a range of mortgage funds you could qualify for. We make this information precise by taking the next steps – making an application then getting you approved.
Using the information you provide and gathering additional details such as your credit bureau, my team will build an application for mortgage financing on your behalf. After considering your situation carefully, I will carry out conversations with multiple lenders who I feel may be the best fit. Being an independent mortgage advisor, I have access to the best terms and rates at over 60 different banks, credit unions, trust companies, mortgage corporations and alternative lenders.
I will report back to you with informal offers from at least two potential mortgage lenders, including my best recommendation. Once you have made a decision on a lender, I will formally submit your application for Approval (if you already own or have agreed to buy a specific property), or Pre-approval (if you don’t yet own a property but want to be armed with qualification for a certain mortgage amount).
A couple of days (or depending on the lender, hours) after I submit, the lender will approve or pre-approve you for a certain amount of mortgage financing, with terms and conditions that I will explain to you clearly. This comes in the form of a Commitment Letter, which “locks you in” up to 120 days at your rate and terms. This gives you time to arrange your affairs and/or shop for a new home. If rates happen to improve during your lock-in period, don’t worry – your rate will either float down as well, or I can get you re-approved. During this lock-in period, please inform me whether your employment/financial affairs change. If possible, please keep things “status quo” with your income and debts until your mortgage ultimately funds.
Once we have a conditional Yes from a lender, the task at hand will be to make the lender’s commitment “firm.” This is done by providing them with documentation they have requested that verifies your income/employment, your financial affairs, the source of your down payment if you’re buying, the property you own or are buying, and more. I’ll help describe the documents in detail, and will keep a running checklist for you to wrestle to the ground. The documents needed will vary with the nature and complexity of the file, and the lender. A general guide of the documents usually needed can be found here.
If you’ve been Pre-Approved but haven’t yet made an offer on a property, it’s best practice to submit all of the requested information about You in the meantime. Once you’ve entered into a contract to purchase, we’ll cooperate with your Realtor to generate the information needed to satisfy the lender about your Property. This will include a valuation of the home, usually in the form of an appraisal – which your Realtor or I will help stick-handle.
Once your mortgage lender has received and reviewed all of the information about You and your Property to their satisfaction, all of the approval’s conditions will be met and the wheels will be set in motion to fund your home. The lender will generate documents disclosing the details of the mortgage itself; a disclosure of the fees and costs of borrowing; the parties to the mortgage transaction; and the optional availability of mortgage insurance, which I will describe so that you can either accept or decline the coverage (by law).
Once Firm Approval is triggered, my job will be to keep the lines of communication flowing between you, your Realtor, your lawyer and your new mortgage lender. We’re landing this plane at the completion date – which is either the actual contract date you purchase a new property, or the date on which funds are advanced on your existing one. Depending on the circumstances, you’ll sign your documentation just before the completion/funding date with your lawyer, your notary, a title agent or your new lender – and I’m there for you, to introduce you to these pro's and keep the ball marching down the field.
Completion day is congratulations day! The mortgage funds are conveyed and you have now either purchased or refinanced your home.
This is more like "Step 7 & Beyond." After your mortgage is funded, I actively manage your largest debt, not unlike a wealth advisor manages your savings and investments. That means letting you know when your mortgage rates or products change; creating and recommending hedge strategies to minimize your cost of home ownership; protecting your interests when it’s time to renew; or just being there to advise and act fast if your circumstances ever change. I’ll keep in touch regularly (but not too regularly I promise); and I have fun with my blog. Please join me and my team in your next mortgage experience.