Mortgage Loan Closing Process From Application To CTC
This guide covers the mortgage loan closing process from application to clear to close. A normal mortgage loan closing normally takes 30 days. However, we can probably expedite a mortgage loan closing in the case of an emergency. There are instances where home closings can be done in less than two weeks. If borrowers cooperate with the mortgage lender in getting all required documents and conditions, closings can be expedited. This article will discuss and cover Mortgage Loan Closing Process From Application To CTC.
Mortgage Application Process
The first step towards a mortgage loan closing is the mortgage application. The first step in the mortgage process is when the officer takes an official mortgage loan application called 1003. The loan officer will prepare the 1003 mortgage application for loan applicants. Borrowers need to sign, and a credit will be pulled. The loan officer reviews credit and runs the file through the Automated Underwriting System. Pre-Approval is issued. Once borrowers execute real estate purchase contracts, disclosures get issued/ Borrowers need to sign proper disclosures and a list of required documents that will be needed.
Required Documents By Borrowers To Start Mortgage Process
Required documents include two months’ bank statements, two years’ tax returns, 30 days’ paycheck stubs, two years’ W-2, 12 months of canceled checks for rent verification, asset information such as 401k or IRA statements, and other documents that apply to the mortgage loan borrower such as bankruptcy papers, child support payments, divorce decree, etc. This process normally takes no more than two days. The Mortgage Process has officially started.
Mortgage Processing
Once the loan officer has the real estate purchase contract and documents required, the loan application gets assigned to a mortgage processor. Once the borrower has submitted the signed application and all the requested documents, it gets processed. The mortgage processor makes sure that all of the information in the mortgage application is correct/ The mortgage processor makes sure all the necessary documents are to avoid potential conditions by the underwriter. Processing takes one to two business days. The loan is then submitted to underwriting.
Underwriting Process Leading To Mortgage Loan Closing
Once the mortgage loan processor has processed the application, it is submitted to the underwriting department and assigned to an underwriter. The underwriter goes through the application, verifies all the information on the application, and cross-checks it with the documents. They verify tax returns with the IRS, make sure there are no overdrafts on bank accounts, and ensure they can afford the monthly mortgage payments. They also review the credit report and will note any discrepancies and vague items that need clarifying. This normally takes two days.
Re-Establish Credit and Boost Your Credit Score
What happens if the borrower has credit disputes or does not meet the minimum credit score requirements? That’s when delays come into play. Getting rid of credit disputes on non-medical collections or derogatory credit tradelines can take time. Some lenders have overlays on government and conventional loans. Consider a fast loan if you have trouble qualifying for an unsecured loan. This loan requires collateral, such as a car or home, which can help you get approved even if your credit score is low.
By taking these contemplated steps, you can increase your opportunity of getting approved for a loan after Chapter 7 bankruptcy. Remember that getting approved may take consistency and time, so be patient and focus on rebuilding your credit.
Shop around: Not all lenders have the same standards for approving loans after bankruptcy, so it’s essential to shop around and compare offers before choosing one. Be sure to read all the fine print so you understand the terms and conditions of each offer before making a decision. Following these resourceful tips can improve your chances of getting approved for a loan after Chapter 7 bankruptcy. Good luck!
Conditional Loan Approval Leading To Mortgage Loan Closing
Once the underwriter reviews your file and is comfortable with your ability to pay, you will get conditional approval. The appraisal is then ordered. The underwriter will issue additional conditions, if any, for clarification, such as updated bank statements, updated paycheck stubs, verification of employment, or other minor conditions. The appraisal normally takes a week. Once the appraisal is turned in, the underwriter reviews the appraisal and will grant a clear to close. To be on the safe side, a 30-day window is what it takes for a mortgage loan to close. However, the fastest mortgage loan closing can occur in three weeks as long as everyone is on the same page. Dustin Dumestre, a senior loan officer at Gustan Cho Associates explains about the mortgage loan closing process until the clear to close has been issued as follows:
Again, here are a few things you must act on to qualify: Check your credit report and score. You need to be aggressive and stay on top of this. One of the first things you must do is check your credit report and score. Checking and reviewing your scores will give you a good idea of where you can start and stand. Lenders will look at your scores and report when considering your application. Get current on all your bills. Lenders will want to see you’re present on all your accounts, so stay up-to-date on payments. Show proof of income.
Lenders will also want proof and evidence of income to determine whether a buyer can afford the loan payments. Be prepared to provide pay stubs or tax returns as documentation. Find a co-signer. If your credit score is still low after taking these steps, you may need to find a good co-signer to help you get approved for a loan. A co-signer agrees to make the loan payments if you cannot, which is a big responsibility. Consider and choose someone with good credit and whom you trust before asking them to cosign your loan. Nothing is guaranteed in the mortgage loan closing process until the file is closed. The mortgage loan closing process does not need to be stressful. As long as the borrower cooperate with the mortgage processor and loan officer during the mortgage loan closing process, there is no reason why the mortgage loan closing process should be stressful.
