Specified in the Sales Contract, you must complete a mortgage application, under the terms specified in the Mortgage Contingency section, typically within seven days of the execution date.
Once your Sales Contract is fully executed, you will want to immediately contact your Mortgage Broker, schedule an application appointment, and discuss the possibility of locking in the prevailing interest rate. Since you have hopefully already been prequalified or preapproved (See Get Prequalified), you will already know how you want your financing structured, the amount of financing, and the loan program, to best suit your needs.
Your Mortgage Broker will request copies of the necessary documentation such as paystubs, W-2s, bank statements, etc. at the time of the loan application. The application will take one to two hours depending upon the complexities of your financial situation and can be completed over the telephone or face-to-face. It is best doing the loan application in this way as there will be less misunderstanding with the lender. You will be given copies of the application itself and all of the required disclosures. Assuming you applied for a conventional, non-QM/Sub-Prime financing, you should immediately receive an automated underwriting recommendation as well. This “recommendation,” issued from either FannieMae (Federal National Mortgage Association) or FreddieMac (Federal Home Loan Mortgage Corporation), will detail the conditions the lender’s human being underwriter will want to review prior to issuing a preliminary approval.
The conditions may cover a wide scope, but typically are related to proving what you stated on the loan application and an appraisal to validate that the sales price is no more than the fair market value of the property. You and your Mortgage Broker should work promptly to assemble the necessary documentation to satisfy these conditions.
Once your loan application file is complete, your Mortgage Broker will submit your file to the lender’s human being underwriter for a decision. The written approval (a.k.a. mortgage commitment), issued by the lender, is what is needed to comply with the mortgage commitment contingency specified in your Sales Contract. You and your Mortgage Broker will need to ensure that this written approval is forwarded to the Listing Agent and/or Seller by the specified mortgage commitment date -- typically 30 days from the execution date.
Once this contingency has been satisfied, you should work closely with your Mortgage Broker to address any remaining conditions which would be detailed in the lender’s approval. All conditions should be satisfied at least one week prior to settlement to ensure that you don’t experience problems at closing.
We hope you consider Professional Mortgage Consultants (PMC) for your mortgage financing needs. See About PMC. PMC is proud of its 100% approval rate over 29 years -- no loan application we’ve taken has ever been rejected. And, our referral rate from previous customers is consistently very high: In 2020, 100% of our clients were either previous customers or referred by previous customers. See Reviews. Our low overhead plus our unique business concept of one person contact to find & finance your new home means far greater efficiencies than most real estate-owned mortgage companies can provide. Thus, our interest rates tend to be extremely competitive, and we never impose any “junk” fees beyond those of the lender’s charges. Additionally, one-person contact for both the real estate sales transaction and the mortgage transaction means less hassle for you, less duplication of effort, and direct access to the one person responsible to getting you to settlement, with no surprises.
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