As overwhelming as it all may seem, the mortgage approval process really consists of 6 main parts. When looked at separately, it becomes less intimidating.  Working with an experienced mortgage professional who has your best interest in mind makes it an even better experience.  Let's look at what you can expect...

• Pre-Approval
• House Shopping/Purchase Agreement
• Application
• Mortgage Processing
• Underwriting
• Loan Approval/Closing

• One of the most important things to have in hand as you begin to look for your home is a pre-approval letter.  You will have lenders that offer pre-qualification, but they are far less "valuable" than a pre-approval.  A pre-qualification gives a cursory, unverified look at your finances and credit.  Therefore it is not a full picture.  In order to receive pre-approval, the lender must pull your credit and verify your income.  While this is not a guarantee of a loan, it shows that you are qualified to purchase a home up to a certain loan amount.  This also puts you in a good position with the seller if there are competing offers.
• At this time, you will fill out a mortgage application and we will pull a three-bureau credit report.  This is also the time to gather additional documents that will not only be necessary for your pre-approval but ultimately for your complete loan application.  These documents may include income information (pay stubs, tax returns, W-2's) and personal information such as valid photo identification.
• As we look over this information, we will determine your debt-to-income ratio (DTI).  This is a measure that compares your debt payment to your overall income.  The highest DTI that you can have and still qualify for a loan is 43% (in some programs up to 55%).  This means that your monthly debt payments can equal no more than 43% of your gross monthly income.  Also, one can only qualify for a home loan with a monthly debt payment of no more than 28%-31% of their gross monthly income.  Putting all of this information together, helps us determine the loan amount that you would likely qualify for.

• With pre-approval in hand, you will work with your real estate professional to find the home that is just right for you.
• Once you have negotiated a contract to purchase, we will continue with your complete mortgage application.
• At this point, we should already have some of the necessary documentation.  However, there will likely be more that will be needed as your loan is processed.
• The home appraisal will also be ordered during processing.  This is necessary as the lender needs to make certain that the property's value offers sufficient collateral in relation to the loan amount.
• After we have fully processed your application and have all of the necessary documents, we will submit your "loan package" to the lender's underwriter.

• From here, the underwriter will review to make certain that your application and documents are accurate and truthful.  They will also analyze your risk to determine if the terms of your loan are acceptable and meet internal guidelines and external regulations.  Once this is done, the underwriter will determine if your loan is approved or denied.  After receiving final approval, we will begin to work with all parties to schedule your closing.  It will be scheduled with an attorney on a day and at a time that is agreeable to everyone - most importantly you (the buyer) and the seller.

• One key item remains and that is your Closing Disclosure.  You will receive this three days prior to closing for your review and comparison to the Loan Estimate that you received after the completion of your loan application.  Although this is a closing document, it must be signed before midnight of that day in order for your closing to proceed on time.  The day of your closing is the last part of the process.  After signing the remaining documents on that day, you will receive the keys to your new home and walk away a happy homeowner!