So you are preapproved to buy a house, you write your purchase agreement, now what???? Once you have written your purchase agreement and it's accepted, your lender goes to work behind the scenes! The first step is to make sure your inspection is ok. Once that is done we order an appraisal.
There is a difference between an inspection and an appraisal. The inspection is done with you to go through the home and make sure everything is in working order and if there are any major problems. The appraisal is done to make sure the value is there for the lender and if it is an FHA or VA appraisal, if there are any work orders that need to be completed for the lender to accept the property.
During the processing of the loan, we verify all your income and assets (money in the bank used for closing and any required reserves). We make sure that everything is in order as required by the loan types. FHA, conventional and VA loans all require different things as far as income, months of reserves after closing, money required for closing. Once the processor (your loan officer has a processor that does all the work behind the scenes) verifies all the information required for the loan, they submit the file to an underwriter.
An underwriter then verifies again everything that has been included in the file and makes sure it meets the program guidelines. The underwriter may have questions on the appraisal, income qualifying or assets. They need to make sure that the buyer has the ability and willingness to make the payments on the mortgage. Each loan program has specific requirements and each investor may have slightly different guidelines for the programs. If the underwriter has questions or needs more information, they will either approve the loan with conditions or possibly suspend the loan until they receive more documentation. Once the conditions have been met, the loan is final approved for closing and the closer (sometimes it is the processor) will draw up all the closing documents and send it to the title company.
At the title company, there is a closer that is a 3rd party to the transaction (not involved in the mortgage or purchase agreement) that will go over all of the documents at closing with the buyer and seller. Sometimes the closer works with both the buyer and seller, sometimes there are two closers there – one for the buyer and another one for the seller. Once you have signed all the documents at closing, the closer will copy everything and cut checks to the mortgage company and seller and anyone else that needs one! After that is done, you get the keys to your new home!!
There are several people involved in the real estate process that the buyer may never meet – the appraiser, the processor and the underwriter. Some companies have others that help in the process. You may get phone calls from both your loan officer and your processor, sometimes you will only hear from the loan officer. Make sure as you are going through the process that you understand everything. It is an important transaction and you want to make sure things are done correctly. If something doesn't seem right at closing, ask questions. If you don't understand something, ask. As a lender, I would rather have you ask a lot of questions and make sure you understand the process, than not to ask and feel like you don't know what is happening!
Buying a home is an exciting time, but sometimes it gets a little stressful – we try to make it as fun as possible, while making sure everything is done correctly and on time!!
