MORTGAGE PROCESS

Pre-qualification

"Prequalification" occurs before the loan process actually begins, and is usually the first step after initial contact is made. In a prequalification, the lender gathers information about the income and debts of the borrwer and makes a financial determination about how much the borrower may be able to afford. Different loan programs may lead to different values, depending if you are qualified for them, so be sure to get a prequalification for each type of program you are suited for.

Application

The "application" is actually the beginning of the loan process and usually occurs between days one and five of the loan. The buyer, now referred to as a "borrower", completes a mortgage application with the loan officer and supplies all of the required documentation for processing. Various fees and down payments are discussed at this time and the borrower will receive a Loan Estimate (LE) within three days which itemizes the rates and associated costs for obtaining the loan.

Opening The File

This occurs between days 3 and 10. At this time the lender orders a property appraisal, property survey and credit reports, mails out requests for verifications, if necessary, for employment (VOE) and bank deposits (VOD) and any other documents needed for processing of the loan. All information supplied by the borrower is reviewed at this time and a list of items not yet received is compiled.

Processing

Processing occurs between days 5 and 25 of the loan. The "processor" reviews the credit reports and verifies the borrower's debts and payment histories as the VODs and VOEs are returned. If there are unacceptable late payments, collections for judgement, etc., a written explanation is required from the borrower. The processor also reviews the appraisal and survey and checks for property issues that may require further discernment. The processor's job is to put together an entire package that may be underwritten by the lender.

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