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Mortgage Education
Your Loan Transaction Step-by-Step
"We received great advice and superior service and support from Craig. He is a true professional, and working with him has been one of the best financial experiences we have ever had. In a very competitive time in the mortgage business, Craig is a real pro who you not only like to deal with, but also someone you can trust." — Paul & Donna Resten, Franklin, MA |
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1. Pre-Qualification
It is important to get pre-qualified for a mortgage so you’ll know in advance how much home you can afford. We can pre-approve you in as little as 1 hour!
2. Loan Search
It is important to work with a loan professional with whom you trust, offers low rates and honest information - at Fairway we provide all this and more.
3. The Hunt
The buyer begins shopping for a home. When the right one is found, the terms of the sale are negotiated, including the sale price and often the type and conditions of the loan being sought.
4. Loan Application
It’s crucial to supply as much information as possible, as accurately as possible. All outstanding debts, as well as assets and income should be included.
5. Documentation
Paperwork supporting the application must also be submitted. Information commonly sought includes pay stubs, two years’ tax returns and account statements verifying the source of the down payment, funds to close and reserves.
6. Appraisal
An appraisal on all home sales is required. This step could jeopardize a deal if a big discrepancy were to exist between the home’s sale price and the appraised value.
7. Title Search
This is the time when any liens against the property are discovered. A lien may have been placed on a property to ensure payment of outstanding debts by the owner. All liens must be cleared before a transaction can be completed.
8. Termite Inspection
Most purchase loans require an inspection for termite and water damage. Some problems may need to be repaired before finalizing the sale.
9. Processor’s Review
The loan processor packages all pertinent information to be sent to the underwriter, including any explanations that may be needed, such as reasons for derogatory credit.
10. Underwriter’s Review
Based on the information put together by both the loan executive and the processor, the underwriter makes the final decision on whether a loan is approved.
11. Mortgage Insurance
Many lenders require private mortgage insurance when borrowers put down less than 20% on a loan. Even if a loan meets the standards of a lender, a mortgage insurance company could choose to deny coverage. At Fairway we have programs that make mortgage insurance unnecessary.
12. Approval, Denial or Counter Offer
In order to approve a loan, the lender may ask the borrowers to put more money down to improve the debt−to−income ratio. The borrower may also need a bigger down payment if the property appraises for less than the purchase price.
13. Insurance
Lenders require fire and hazard insurance on the replacement value of the structure. Flood insurance will also be required if the property is located in a flood zone.
14. Signing
Final loan and escrow documents are signed.
15. Funding
The lender sends a wire or check for the amount of the loan to the title company.
16. Close of Escrow
Documents transferring title are recorded with the county recorder.
17. Confirmation of Recording
The title company then authorizes the escrow company to draft a check to the seller.
18. You own your own home!