You have made the first steps in educating yourself on the various options available, which is probably how you found our site.  Congratulate yourself.

Here is a step-by-step guide for what you can expect in the residential mortgage process.  We are going to try to cover all the steps as completely as possible.  We are outlining a full documentation loan.  This is the typical, and usually the best scenario for most people.  There are many other programs outlined in the residential section of the loan center (link).  The processes will still be identical, just less paperwork.

STEP ONE – GET ORGANIZED
Get your financial information ready, use this as a check list of everything that applies to you.

1. Two years tax returns
2. Two months most recent pay stubs
3. Two years W'2s, or 1099 forms
4. Two month rental checks or mortgage payments
5. Two months bank statements
1. Checking
2. Savings
3. 401-K or retirement
4. Annuities
5. Stock, bonds, money market statement (investment)
6.  List of all real estate owned, addresses, tax information, and estimated value
7. List of all automobiles, equipment, collections, and any other “asset” or item of value you may have.  List alongside each asset, any debt associate with the asset, and provide a monthly billing statement  if you make payments.
8. Get a list of all your debts and current monthly statements
1. Loans: mortgages, credit cards, auto loans, school loans, lines of credit, store cards, etc
2. Any judgments or tax liens, or payment programs for collections
3. Child support / alimony warrants or payments being made
9. Copy of your divorce or separation agreement if applicable.

Not all the above will apply to you.  It is always best to call our office in advance and talk about your scenario ahead of time.

STEP TWO – GET PRE-QUALIFIED OR PRE-APPROVED
Two terms, two distinct meanings;
                Pre-qualified:  A very simple process where you bring in a pay stub or speak with a consultant and answer some basic questions about your finances.  Your credit report may not even be checked at this moment.  A very quick outline of an approximate value of an estimated mortgage amount you might be able to afford.  A very basic consultation and determination.  Get the idea that a pre-qualification may not be worth much?  However, if you are just starting to look at homes, at a minimum, you should be pre-qualified.  Many real estate agents will not show you properties, and many  sellers of higher-end homes are requiring potential buyers present a pre-qualification letter before you can view the homes listed. 
                Pre-approved:  Very close to a complete application, and in many cases, an application has been completed and you only need to select a home that fits your criteria to finalize the process.  At this time, your credit score has been obtained, all the documents in step one have been reviewed, and you have an exact range as to what you can afford and a few loan programs you will qualify for.  A broker will be able to shop your loan out to at least three lenders to get you the best terms for you to review and select.

Steps for each:

1. Contact our office and speak with a consultant.
2. Have as much of or all of the items in step one available.
3. Sign an authorization form for your credit to be obtained or know your score.           
1. It is always best if you know and keep apprised of your score and from which repository it came from.
2. Sign up with one of the credit companies and obtain your score for a small fee. YOU can get your score without it effecting the score, but we or any other lender may damage your score with too many “hard looks”
4. When you are speaking with the loan originator, ask to see the rate sheets and ask what the Par rate is. 
5. Discuss with your loan consultant which programs are available to meet your criteria, and if they can do a comparison for you on the various programs and lenders so that you know what the entire transaction will cost you. 
6. Get a pre-qualification or pre-approval letter to take to your Realtor.
7. Start to look properties.  See our tips on the home buying process HERE

STEP THREE – MAKE APPLICATION

1. Submit, negotiate and come to terms on a home you like with your real estate agent.
1. Bring a complete copy of your purchase offer, and all addenda with you when you make application
2. Bring/send/email everything applicable from step one to our office
3. Get rates from the three banks and discuss the program(s) total costs
1. Get a complete GFE for all applicable programs (which may just be 1 or 2)
1. Review it completely and ask questions
4. Select a lender and program to go with and have your consultant submit your loan for approval with the lender.

Notes:
                Your loan consultant will put all your information into an application (form 1003) which you will sign.  You will probably sign this form at least 2 times before closing and again at closing.  As your scenario changes during this process up until you “lock” your loans terms, you may have another GFE to sign as well.

1. Work with your consultant, Realtor, and Lawyer to determine your best closing date and when you should lock in the terms of your loan.  If you wait, your rates may change.  If you lock your rate and do not close on the loan in time, you will pay fees to continue to have that rate, until you close.  These fees can be considerable, so talk about this with your consultant.

STEP FOUR – THE PROCESS OF PROCESSING

1. The consultant (or another member of the firm) will then start to process your loan’s documents to the lender for final approval by the bank
2. Several forms including disclosures are now drafted and sent to you (borrower) for signatures.  .  Carefully read them and ask your consultant about anything that you have questions on.
3. The appraisal is ordered
1. You may pay the broker/bank for this fee, or pay the appraiser directly.
4. The loan is approved by the bank

•                 A.  Additional conditions may have to be satisfied before closing which is normal.
                  B. Sign the commitment and return it to our office, along with a group of lender disclosures that need to be signed and returned
  5. Selling counsel starts their process
                  A. Abstract of title is updated / ordered along with municipal searches (downstate) and a tax search.
                  B. Survey is ordered or updated
                  C. Preliminary deeds and title transfer documents are prepared
  6. Selling counsel forwards to buyer’s counsel all the title and transfer documents, tax and municipal searches to the buyer’s counsel.
  7. Buyer’s attorney reviews everything and prepares the title policy documents for the owner and lender.
                  A. Ask your attorney if you should get an owner’s title policy.  You will need a lender’s policy for the bank.  These are different policies, and each has its own cost. 
  8.  Buyer’s attorney forwards all the title documents to the lender’s attorney.
                  A.  At times you can have the lender’s and buyer’s attorney be the same person /firm, but there are issues with this as well, speak with your attorney for further advice.
  9.  All the pre-closing stipulations are complete by everyone and we are ready to close.  The lender issues a “clear to close” letter.  The closing is scheduled.

STEP FIVE – CLOSING

1. Show up to closing prepared to sign  lots of papers that day.
2. You should have your HUD-1 form sent a day in advance so you know how much money in certified funds to bring.  Do not bring cash or personal checks.  We will be informing you along this entire process as well as the day before closing.
3. You will sign a lot of papers, but take the time to understand what you are signing.  If one of our staff is there, ask them or your attorney.  They are there to help you understand this as well.
4. Transfer documents are signed, money is exchanged, and the keys are handed over to you for your new home.

As you can tell, there are many steps involved, and many small steps we did not outline.  But at a minimum, these are general steps that will be involved, and the time frame can be as short as 15 days and as long as 90 days.  On average, we close within 30 days from application, if there are no delays from the attorneys, surveyors, or title issues.  We will walk you through this process, that is what you pay us for, and we strongly feel you get more than what you pay for. 

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