Adam Mortgage Approval Process
6 Steps Prior to Closing
1. The Mortgage Pre-Approval
This step is usually considered a financial pre-screening and happens on the frontend of the loan approval process, before you start looking for a home. The Adam Mortgage team will review your financial status such as income, assets, and debts. We may also request your credit report for evaluation. The pre-approval process allows you to narrow your home search and your real estate agent will request a copy of the pre-approval letter prior to showing homes for sale.
2. New Home Search & the Purchase Agreement
Since you have been pre-approved for a certain amount, you can shop with confidence within your price range. Adam Mortgage is not involved at this stage. Once you’ve made an offer to buy, the next step of the mortgage approval process is filling out the our loan application. See our loan application checklist.
3. The Mortgage Loan Application
At this time, you have been pre-approved for a loan. You’ve found a home and the seller has accepted your offer. Now it’s time to make the formal loan application. The application will request information about the property being purchased, type of loan desired and further information about the borrowers.
4. Mortgage Processing
Once you have a fully executed Purchase Contract and a completed loan application, the file will move to an Adam Mortgage processor. They will collect several different documents relating to you and the property you are purchasing. Secondly, they will review the file to ensure it contains all of the documents needed for the underwriter to process. The processor will order your credit report, verify income, assets and employment. They will also order the appraisal which determines the value of the property. At this point, the file is ready to be submitted to the underwriter.
5. Mortgage Underwriting
This is the MOST important step in the loan approval process because it determines whether or not the loan is approved or not. The underwriter will closely examine all of the loan documentation prepared by Adam Mortgage’s processor, to make sure it complies with all lending requirements and guidelines.
The underwriter can either approve or reject the loan request. Their primary responsibility is to evaluate what level of ‘risk’ is associated with the loan. The ability for you to pay your mortgage payments will be determined by reviewing your credit report, your debt-to-income ratio and assets. It is customary that the borrower receives a list of conditions that is needed to resolve any questions or clarifications that they may require for the approval.
6. Mortgage Loan Approval And Closing
If the underwriter approves the borrower and the property being purchase, he/she will label it “clear to close”. This is considered the final step in the mortgage loan approval process. The last step is the closing. Prior to the closing, the borrowers will receive a Closing Disclosure, which will ‘finalize’ the details of the loan. This disclosure will identify the loan terms, your monthly mortgage payments and the dollar amount you will need to pay in fees and other closing costs. The lender will send all of the supporting documents to a title company that has been chosen to handle the closing. The home buyers and sellers will review and sign all pertinent documents. Now, you have successfully fulfilled the home buying and loan processing experience.