You have completed your mortgage application and provided your income, asset, and other requested documents. So, what happens next?
At Capital Funding Mortgage, we believe you should understand what is happening with your mortgage from the time you apply until the day you close.
Once we receive your application and supporting documents, we begin reviewing your information, determining the appropriate loan structure, and preparing your mortgage for the next stages of the approval process.
Although every mortgage is different, here is what you can generally expect.
The first thing we do is carefully review the mortgage application and documents you provided.
We generally look at your:
Our goal is to identify any questions or missing items early in the process rather than waiting until the file reaches underwriting.
If something additional is needed, we will contact you and explain exactly what we need.
Your credit report is an important part of your mortgage application.
In addition to your credit scores, we review items such as:
Your monthly obligations are compared with your qualifying income to determine your debt-to-income ratio, commonly referred to as your DTI.
If something on the credit report needs clarification, we will discuss it with you.
After reviewing your application, credit, income, assets, and property information, we can determine the mortgage program and loan structure that best fits your situation.
Depending on your circumstances, we may review different options involving:
As a mortgage broker, Capital Funding Mortgage can evaluate available loan options and help you understand the differences before your loan proceeds.
Once your loan application moves forward, you will receive mortgage disclosures.
One of the most important documents is the Loan Estimate.
The Loan Estimate provides important information about your proposed mortgage, including:
Do not be concerned if you have questions when reviewing these documents.
Mortgage disclosures contain a great deal of information, and some of the terminology can be confusing.
If something does not make sense, contact me. I would much rather have you ask the question than sign a document you do not fully understand.
Once the initial review and disclosures are completed, your mortgage file moves into processing.
The loan processor helps assemble and organize the documentation needed for underwriting.
During this stage, additional information may be obtained or verified, including:
You may receive a request for an additional or updated document during processing. This is completely normal.
Many mortgage transactions require an appraisal.
The appraisal is completed by an independent licensed or certified appraiser who provides an opinion of the property's market value.
The appraiser considers factors such as:
For a home purchase, the appraisal helps confirm that the property provides adequate security for the requested mortgage.
For a refinance, the appraisal may help determine the amount of equity available in the home.
Not every mortgage requires a traditional appraisal. Depending on the property and loan program, an appraisal waiver or other valuation method may sometimes be available.
The title company researches the property to confirm ownership and identify issues that could affect the lender's interest in the property.
Title work may identify:
For a home purchase, the title company also plays an important role in transferring ownership from the seller to the buyer.
Once the loan file contains the necessary documentation, it is submitted to an underwriter.
The underwriter reviews the entire mortgage file to determine whether it meets the requirements of the lender and the particular mortgage program.
The underwriter generally evaluates:
Many borrowers think underwriting means simply receiving an approval or denial.
In reality, most mortgage approvals contain conditions that need to be satisfied before the loan receives final approval.
A conditional approval is a normal part of the mortgage process.
The underwriter may request items such as:
Receiving an additional document request does not necessarily mean there is a problem with your mortgage.
Sometimes an underwriter simply needs additional information to document that a particular lending guideline has been satisfied.
When we receive conditions from the lender, we will work with you to get them resolved.
Once the underwriter has reviewed and accepted all required documentation and conditions, the loan can receive final approval.
You may hear this referred to as Clear to Close.
This means the underwriting portion of the mortgage is substantially complete and the loan can proceed toward settlement, subject to any remaining final closing requirements.
Before closing, you will receive a Closing Disclosure.
This is an important document because it shows the final financial details of your mortgage transaction.
It includes items such as:
At Capital Funding Mortgage, we want you to understand these numbers.
If you have questions about your Closing Disclosure, contact me and I will review it with you.
Even after a mortgage receives approval, the lender may perform certain final checks before closing.
These can include:
For this reason, it is very important to avoid making major financial changes while your mortgage is being processed.
Until your mortgage has actually closed, please contact us before making a significant financial change.
In particular, avoid doing things such as:
Even when you have already received a mortgage approval, a significant change in your credit, employment, income, assets, or debts can potentially affect the loan.
If you are unsure, call me before making the change.
Once the loan is approved and all final requirements have been satisfied, it is time to close.
At closing, you will review and sign the final mortgage documents.
For a home purchase, ownership of the property is transferred to you as part of the settlement.
For a refinance, your existing mortgage is generally paid off and replaced by your new mortgage.
The settlement or title company coordinates the signing of the documents and distribution of funds.
Once your application and documents have been submitted, the process generally follows this path:
Application and Document Review → Loan Disclosures → Processing → Appraisal and Title → Underwriting → Conditions → Final Approval → Closing Disclosure → Closing
There are a lot of moving parts behind the scenes, but you should never feel that you have been left wondering what is happening with your mortgage.
I have been in the mortgage business for many years, and one thing I have learned is that borrowers appreciate being able to speak directly with someone who can answer their questions.
If you are currently working with Capital Funding Mortgage and have a question about your application, documents, underwriting, appraisal, interest rate, Closing Disclosure, or anything else involving your mortgage, please contact me.
If you are considering buying a home or refinancing and have not yet applied, I would also be happy to discuss your situation and answer your questions.
Capital Funding Mortgage
Phone: (215) 601-6724
Email:info@capitalfundingmortgage.com
Website:www.capitalfundingmortgage.com
41 University Drive, Suite 400 #475
Newtown, PA 18940
I am happy to personally discuss your mortgage options and help you understand what to expect from application through closing.
— John Madden
Capital Funding Mortgage
Mortgage procedures, underwriting requirements, documentation requirements, appraisal requirements, and approval timelines vary by borrower, lender, loan program, and property.What Happens After You Complete Your Mortgage Application and Submit Your Documents?
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