Getting approved for a mortgage does not have to be a long and drawn out process. When Classic Mortgage Corporation provides your home financing, the loan process is completed quickly and with personal attention to your needs.
Classic Mortgage is ready to work with you to make the home financing process as easy as 1-2-3. Below is a step-by-step guide to help you understand the process:
The first step is to submit a Residential Mortgage Loan Application. You can submit your application using several options, depending on which is most convenient for you:
- Visit our office and speak with a Mortgage Consultant
- Mail your application
- Fax your application
No matter how you choose to submit your application, you will work with an experienced Mortgage Consultant throughout the entire loan process. It is highly recommended that you schedule an appointment and complete the loan application in person with a Mortgage Consultant, especially if you are a first time home buyer. We take pride in making sure you understand the complete mortgage process.
During this initial step you will also be asked to provide us with a check, debit card or credit card information to cover the cost of ordering your credit report and/or property appraisal.
It is also necessary to provide the following list of documentation to get your loan approved:
- Two most recent paystubs
- Copy of Social Security Award Letter, if applicable
- Proof of pension income, if applicable
- Two most recent years W-2’s and Complete Federal Income Tax Returns (including all schedules)
- Two most recent months bank statements (all pages, even if blank) for any checking, savings and 401k’s
- Complete Bankruptcy Papers, including a copy of the discharge, if applicable
- Complete copy of Divorce Decree, if applicable
- Driver License
When your application is received, your file is assigned to a Mortgage Consultant. The Mortgage Consultant works with our support staff as a team to gather all the supporting documentation required before your loan is reviewed for approval. You may hear this step referred to as “processing” your loan application. A copy of your credit report is ordered as well as verifying income, assets, liabilities, etc.
During the processing state, your loan application will be submitted through an automated underwriting system such as Fannie Mae’s Desktop Underwriter or Freddie Mac’s Loan Prospector. The use of these software applications has become an industry standard. The review of your loan is much more standardized and quicker due to use of this software. The amount of paperwork required to get a loan approved has been reduced, making the process more efficient.
An appraisal of your property is ordered during the processing. This step is necessary to determine the value of the home you are purchasing or refinancing. The appraisal is completed by an independent fee appraiser that is assigned through an Appraisal Management Company (AMC). The appraiser will contact the listing realtor on purchase transactions or you on a refinance transaction for access to the property soon after the actual appraisal is ordered and paid for.
Within three days of submitting your application to us, we will provide you with a Good Faith Estimate of Closing Costs and a Truth in Lending Disclosure. These important documents help you review the estimated costs you may incur with your pending loan transaction. Be sure to review these carefully and ask your Mortgage Consultant about anything that does not make sense.
This next phase, Underwriting, occurs once all necessary documentation has been received. During Underwriting, the file is reviewed to make sure it meets the guidelines of the specific loan programs for which you are applying. Underwriting reviews:
- Credit – how you’ve paid your debts in the past
- Capacity – your actual ability to repay the loan based on your income and other debts you are paying.
- Collateral – the value of the property you are buying or refinancing and are pledging as “collateral” for the loan.
While we try to obtain all required documentation prior to the file going to underwriting, additional documentation may be required during the process. In underwriting, your loan will be approved, denied or suspended for further information.
Do not panic if your loan is denied or suspended for further information. Talk with your Mortgage Consultant about the specific reason your loan was not approved. Further information may be provided to gain an approval or a plan of action may be put into place to work through the underwriting issues to become financeable at a later date.
If the loan is approved and any additional documentation (conditions) have been received and cleared by the underwriter, you are ready to move to the final stages of the process, called closing. Your Mortgage Consultant works with the closing department to ensure the closing of your loan goes smoothly. Classic Mortgage Corporation works with title companies and our lenders to prepare the documents required for closing the loan. To close the loan, you actually go to the title company. Closing is simply signing all the necessary legal papers to formally complete the loan transaction and for the loan proceeds to be disbursed.
Closing culminates the loan process. Shortly after closing, you will receive information from your lender about the schedule of your monthly mortgage payment. It is wise to go ahead and make your first payment at the time it is due regardless of whether you have received information about your billing. During the closing process, you will receive a First Payment Letter that lists the correct payment amount and the address to where your payment should be sent.