STEPS ILLUSTRATED CLEARLY
1. Application
2. Disclosures sent, faxed, mailed, and then sent back
3. Information to back up Quote
4. Good Faith and signed Application
5. File packaged and submitted to Processing Department
6. Appraisal ordered, title opened, escrow opened, payoff demands ordered, subordination ordered, credit repaired, rates watched and locked if appropriate.
7. Back from Processing or before, to get conditions met before submitting to Lender(s)
8. Submit to Lender for Underwriting approval. Lender sends out RESPA's or disclosures. Good Faith Estimate, and Truth in Lending, and also Title forms, to be filled out now(no obligation) but assuming loan goes through, if in file will not need to be done in closing, saving about 30 minutes. In addition, the rates are estimates and not what was sent to be underwritten. It usually is a default in the computer that puts out those rates, as rates change daily and that should be discussed with your Loan consultant.
9. Prior to Documents conditions to be met before Documents issued
10. Conditions, include many things by borrower, credit, income, assets, other properties, other mortgages, other loans, Escrow conditions, and title conditions, HUD-1 or Estimated Closing Statement done, etc.
11. Documents drawn up, about 30-50 pages
12. Documents sent to Escrow. Escrow preps Documents and orders a notary
13. Borrower called to sign.
14. Signing
15. If purchase, no waiting period; if refinance, then 3 working day wait. Prior to Funding conditions are worked on, Insurance changed, Hud done, title work, Demands for loans , Estimated HUD done again.
16. Funding of loan to the Escrow company.
17. Escrow tells Title to go change Title before funds are released to old lender. Some counties computerized some are not. Also, wired monies have a cutoff time of 1 or 2 pm as wires travel through the Federal Reserve system. And only business days apply.
18. Monies released by Escrow.
Once funded it cannot generally be unfunded. So need to worry about locks expiring during days after funding. However, a loan can still go late if title takes longer, so always keep on top the mortgage being paid off. Don't assume!!! There is a pad in the new loan to cover miscellaneous fees, like interest or late fees, etc. But why wait. Pay the mortgage and you will get it back by the bank or the Escrow if you provide evidence or if they call and find out that you paid. But don't count on Escrow to call. Better to get receipt or just wait a week or two and you would get your money back.
Save time and sweat by choosing a quality person, that you want to stay with. Companies change and go out of business, but people move from company to company and their character is assessable whereas a Lender might not be. Why a person? A person is who will care almost as much as you do about your loan. A company has hundreds if not thousands of loans, your one loan is but a bit to them, but a chunk to a loan consultant. So make sure you are with a good person. Character driven as the amounts companies make can be staggering, and tempt many to charge as much as they can get away with. So honesty and integrity count a lot here. The rates change sometimes 3 times per day, so one rate today another one tomorrow and that is the way the market works. So who really knows what rate you should be getting. Thank God for the internet. There are sites where you can compare rates all around the country. Don't necessarily go for lowest as they are awfully difficult to compare to each other. I use it as a gauge to see what I am being charged and if your credit and ratios are inline, as an A borrower and you don't have any special bells and whistles on the loan like cash out, over 80 %, stated income, etc. Then you should qualify for what is being offered on the internet.
A person will make the loan a breeze if they know the job and know how to get things moving.
They can explain options well, and if problems will let you know ahead of time, giving time to renegotiate or to look elsewhere, assuming that company doesn't service that type of program. A good loan consultant will work with appraisers in getting good comparable values so the value of your home is what it is supposed to be. Not overly cautious, nor overly generous. Both can be harmful as overly cautious leads to extra fees if you go over 80% Loan to Value Ratio, or can even dissolve an opportunity. In addition, overly generous can lead to a loan being kicked back or reviewed for the appraisal and another appraisal could be ordered taking up much more time and putting you into a longer lock and thus larger fee, and risking losing the loan if no lock and rates worsen in that time which happened in November of 2001. In addition, if a loan goes over the lock time, their is nothing stating they have to honor the lock extension, that is a courtesy in some cases. If the rates worsen, some lenders will charge current market or half of that as the lock extension fee. Many will only charge another 1/8th or 1/4 of a point in fee, but some went to current market which is quite a challenge.
So a loan consultant will give give information to make a quality decision on. Will assist along the way, getting documents for processing department and underwriting, and documents, and Funding and Escrow and Title and the myriad of many other things. They will protect your interests, they will watch the rates and lock you in when they see them going up. They will know your house, your income, your assets, etc. and can offer insight the next time around. They will also charge you less the next time as many will have access to your information and it will take less time to process. They will know the challenges etc.
TIPS
FIND A GREAT CONSULTANT
TRUST THEM UNTIL NOT TRUSTWORTHY,
GET THE FORMS IN ALL AT ONCE, THE INITIAL AND DOCUMENTS AND FUNDING. DON'T MAKE US CHASE DOWN STUFF. WE HAVE SO MUCH TO THINK ABOUT NEAR THE CLOSE AND THINGS THAT SHOULD BE IN AND ARE NOT ARE A BIG DISSAPPOINTMENT. ALSO, HAVING EVERYTHING IN AT ONE TIME FOR THE PROCESSING THEY LIKE IT BETTER, THE UNDERWRITERS DEALING WITH A HUNDRED FILES A DAY DO NOT LIKE TO KEEP LOOKING AT A FILE FOR AN EXTRA PIECE OF PAPER HERE OF THERE. THEY LOVE AND GIVE FAVOR TO LOANS THAT CAN BE UNDERWRITTEN EASILY CAUSE EVERYTHING IS THERE AND THEY LOVE TO PUSH TO NEXT STEP.
GOOD LOAN CONSULTANTS WILL LOVE TO PROVIDE EDUCATION TO HELP YOU MAKE THE BEST DECISION. WE KNOW THAT YOU NEED TO MAKE THAT DECISION. WE CAN NOT NOR WILL WE IF WE COULD. WE WILL SPEND BETWEEN 20-30 HOURS WORKING ON A LOAN, AND THAT IS NOT SOMETHING WE WANT TO DO IF THE CUSTOMER ISN'T EXCITED, OR IF THE LOAN LOOKS TOO DIFFICULT. OR IF THE BENEFIT ISN'T THAT GREAT FOR THE CUSTOMER. 2 WEEKS TO 45 DAYS IS A LONG TIME TO WORKING AND IF THE BENEFIT ISN'T THAT EXCITING FOR THE LOAN OFFICER, THAT PERSON KNOWS THAT IT WILL EVENTUALLY NOT LOOK TO GOOD TO THE CLIENT EITHER.
Another benefit in dealing with a broker who deals with many companies, is that we get very good at doing loans, as each company is different so we learn so much more. Also, we have access to many more programs in the case of investment properties, or A++++ credit or B,C and D and F credit, then we can go to another company. We know which companies to send things to and we can get the wholesale reps in to give a quick approval in the case of challenging loans.
Don't order an appraisal usually, # 1 if you are not sure you want to do a loan. But important to get one done ASAP as in this busy environment it can take up to 6 weeks with some appraisers.
HOW TO CHECK OUT A PERSON OR COMPANY
Many people are surprised to learn that the names of individuals that they are talking to are not there real names. Nor will they give you there home phone number. Try this at home. Try asking a telemarketer what there home number is, "that you might be interested, but not now and that you will call if interested." See what they do, some might, most will not, as they know some people will call them at all sorts of hours, etc. Well in the mortgage business, if you look on Better Business Bureau sites and other places you will see a host of complaints. Companies get caught doing the old "bait and switch", get caught in a lie, etc. Many companies have gone out of business because of suits against them.
Anyhow, ask your representative who will be handling in some cases $100,000.00's of your money, ask them what their name is, their work number, and if you need to catch them on the cell, ask them for the cell number ,and then just in case your desperate and need to contact in the close or something, get their home number.
Then go to www.infospace.com, put their number in and do a reverse phone lookup and that person better come up on the search. If the name doesn't match, then find another consultant. Ideally, get some references from that person to check them out. Good loan consultants are proud of their work and love to do that. And properly served clients love to talk to people to reassure them they are with the right person. The loan industry is filled with many new people, because of the boom which is not in itself a bad thing, but increases the chances of getting a new person, who can do damage to your loan. Some agents take the application and then the rest of the company does the rest and only in the event if you are leaving will they call you. Some consultants do 100 loans a month, getting paid very little on each one, so the commitment level nor the involvement level is minimal.
Also, check with www.bbb.org, and also www.ftc.gov/bcp/menu-lending.htm, so check out the complaints or otherwise, on the company.