Everyone knows the home buying process can be stressful. The most stressful part of it is the unknown. Most consumers don’t know who all is involved, what happens next or the time frames. Having a high level overview of the Mortgage Loan Process can help alleviate some of the stress.
Mortgage Loan Involved parties
Realtor – handles the sales contract between buyer and seller. Also make sure the home inspection is set and scheduled and can coordinate the closings
Home inspector – this is not required by many if any Lenders. However, most realtors will always highly suggest you get a home inspection to find any potential issues with the home.
Appraiser – goes to the home and does a brief inspection and then finds recently sold homes in the area that are comparable to that of subject property and then creates an opinion of value via his/her appraisal report.
Loan officer – handles the upfront preapproval of a potential buyer to ensure they are qualified to buy at a specific price range. Handles the interest rate and fees for the loan application.
Loan Processor – handles the communication between borrower and loan officer and the Lender and/or Underwriter to ensure all conditions of the loan are met and all documents are provided, including ordering appraisal report, insurance, title work, borrower conditions etc.
Homeowners insurance agent – write an insurance policy to ensure the home is covered upon purchasing
Underwriter – reviews all the documents and makes sure that the loan meets the agency or lender guidelines, and the borrower is qualified to purchase the home.
Title company – search to make sure that the home only has one lien at closing and that is the mortgage company’s lien against the home and there are no other interested parties with liens on the home.
Mortgage Loan Life Cycle
Typically, a potential homebuyer decides they want to think about buying a house. They first call a realtor and ask if they can show them some houses. However, before the realtor runs around town with that consumer showing homes, he/she will want to make sure the potential buyer is qualified to buy the homes they are looking at. The realtor will suggest the buyer call a Loan officer. The Mortgage Loan Officer will then review the consumers’ credit, income and asset documents to ensure they are Preapproved to buyer that home. The Loan officer will write the pre-approval letter to send to the realtor letting them know the purchase price they are approved for. From here they buyer will make an offer and when a seller accepts, a sales contract is drawn up by the realtors and all parties signs. That contract is handed off to the loan officer who starts a complete loan application. The Mortgage Loan officer hands it off to the processor who will order all third-party docs (appraisal, title insurance, etc.) then will proceed to submit to Underwriting for conditional approval. The underwriter will let the processor know what is needed for final approval on the loan and the loan processor will then speak with the consumer and all other parties. Once all conditions have been met, the processor will work with the title company to get all necessary documents to complete the transaction so the buyer can take ownership of the home.
PPMG has years of experience in the mortgage industry and would love to help anyone who has any questions. Please feel free to contact us at Info@prioritypmg.com.