Understanding the Mortgage Process

   The mortgage process can be intimidating, especially for many first-time homebuyers. Buying a home can be one of the most stressful events in a person's life. For example, getting the mortgage approval out of the way right up front has proven to be the greatest stress reliever for a buyer. With an approved loan that has been documented, you are in essence a cash buyer. A seller will be much more likely to favor your offer over someone else's because they know that the sale process is much less likely to fall apart. However, when the process is broken down into several steps, it is easy to follow. The process starts with an application, moves on to the processing phase, then the approval segment and finally settlement and closing.

The Application

   During this phase, the prospective homebuyer will usually need to provide documentation about current income (last 30 days pay stubs), bank accounts (last 2 months bank statements) and their last two years W-2’s. Many mortgage lenders can take loan applications right over the phone in as little as twenty minutes — which makes initiating the mortgage process convenient for the borrower.  A credit report is ordered and returned during the application process.  Most loans can be pre-approved during this application stage. As we said above, the pre-approval process is very important in our changing market. Once a property is chosen and the loan is registered the lender then provides specific loan information and an estimate of closing costs to the homebuyer. 

Application Processing

   Once an application is complete, the lender begins processing the borrower’s information. An appraisal of the home is ordered, and the borrower’s employment and assets are verified.

The Approval Phase

   During the approval phase, the mortgage lender evaluates the application, including its supporting documentation, and approves or denies the loan.  There are even programs in which qualified applicants can receive a decision on their mortgage during their application call.

Settlement

   After a loan is approved and the title search completed, the homebuyer meets with their real estate and closing agents to finalize the transaction and sign any necessary paperwork. This is commonly known as the settlement. The mortgage lender then disburses the funds to the settlement agent. Finally, appropriate documents are recorded at the county recorder’s office and the title is transferred to the buyer.

Closing

    The next business day the homebuyer can take possession of the property and is now a homeowner.

For Southern Utah Mortgage Information
(435)590-1857 - (435)592-2288 - (435)592-2290