Contact a lender as soon as possible – Get Pre-Approved.
Ideally you should get Pre-Approved for a mortgage before you start looking for a home. It makes much more sense to know how much down payment you need and how much your monthly payments are before you start to look for a home. You also want to make sure that you are qualified to make the home purchase and don’t find out after spending time looking at home only to find out you cannot buy it. Either way, if you have already found a home you want to purchase or you are getting pre-approved before hand the first step is to contact a mortgage lender.
The first thing a lender will do is to review your credit report. At this point your credit is either mortgage worthy or not. If not, the lender will suggest some actions to get your credit mortgage worthy. If your credit is found to be good then you continue the process. This step is called Pre-Approval and is the first step in the process of getting a home loan. Your lender will ask you for information about your income and debt in order to figure out how much you can afford to pay for a house. Based on the information you provide, your lender will explain the different loan programs that you are eligible for, and whether the amount you are Pre-Approval for varies based on which type of loan you choose. This should only take about 15 minutes.
The Loan Application
The next step of the home loan process is the mortgage application. Here is where you will provide more details on the information that led to your pre-qualification. Your lender will guide you through the application process and let you know what documentation is needed. Some common requests include:
- Employment verification, including pay stubs
- Evidence of any other forms of income, such as child support
- Tax returns for the past two years
- Bank statements for your checking and savings accounts
- Statements for other assets like your investment and retirement accounts
- Information on any debt you have, such as car or student loans
The mortgage application is completed by you with the assistance of a mortgage professional. Time 15 minutes.
The next step is to provide the mortgage lender with your documentation that supports what you said. The time it takes depends upon you, if you have all of this already gathered then you only need to upload it to the lender which should only take about 10 minutes.
This is followed by Electronically signing all of the mortgage paperwork that is required to get your loan into underwriting. This takes about 15 minutes.
Once you E-sign all of your paperwork, your loan will be submitted to underwriting. It can about 2 days to get your loan approved. Your loan processor’s main job is to verify all of the information that you have provided on your loan application. This means verifying your employment status (W-2s and pay stubs), assets (checking and savings accounts) and outstanding debts (car and student loans).
Getting the title work completed, this step is done by the lender. They order the title work from whomever is handling the closing of the property. This should take about 5-10 days.
Getting a Survey. This is ordered by the Attorney or title company. This should only take about 5 days. If an elevation certificate is needed this will be done at the same time.
Home Inspection. Although this is not required by the lender it is almost always an important thing to get done. This should be ordered right away and is usually handled by the Real Estate Agent. Time 5 days.
Any other inspections such as well, water or septic should be ordered right away and should take about 5 days.
Appraisal is ordered as soon as the loan is submitted to underwriting. This should take between 5 and 10 days.
Loan processors pay particular attention to your income, as lenders don’t want your monthly mortgage payments (including principal, interest, property taxes, and homeowners insurance) to consume your monthly income. Lenders want to be certain that you will be able to comfortably manage all of your current obligations and your new monthly mortgage payments. During loan processing, your application will be handled by several teams of mortgage professionals. Your file must be checked by the processing team, the underwriting team, and the settlement closing team, in that order.
You can speed up the process by the following:
Be Available. While processing and underwriting your loan request, your lender may ask for additional information. They may have questions regarding a lapse in employment history, a maxed out credit card or a sudden drop in income. No matter the query, make sure to respond promptly. Be available and willing to answer any questions that come up.
Provide all documents up front. One of the most important components to shortening the loan process is accuracy. Omitting your employment history, excluding open credit card accounts or fudging past debts will not help you secure a better interest rate or loan. In fact, it will only add to the complexity and lengthen your processing time. Don’t leave anything out.
Prepare for verifications. Let your landlord, boss or anyone else impacted by the verification process know they may be contacted by your lender—and that you would appreciate a quick response.
Ask questions. If you are unsure or confused by any part of the application, speak with your lender. It’s better to address any issues upfront than to leave questions blank or omit any documentation.
So overall if everything is perfect the fastest you can get a mortgage is about 10-12 days. However the average is 30 days. That is why it is important to work with a mortgage broker than can get your loan completed quickly.