Here is an outline of what happens during the approval process.

The FHA Mortgage Broker Mortgage Application Process

Whether you walk into a bank, you apply for your loan on the Internet, or one of our loan officers meets you in your home, all lenders require an actual application. The form is standardized and known as the Federal National Mortgage Association application "1003".

We will want to verify certain information about your application and will require additional information on the property. Your information will include verification of income and employment, assets, and credit history of your application. Some of this information will be provided by you, the applicant, as part of your application process. For example, you will be requested to provide copies of W-2 forms for last year, pay stubs, and bank statements for asset verification.

Other information, such as your credit history, will be obtained directly from the credit bureaus even if you have a current credit report on hand. We will always verify this information independently.

For the property itself, we will order an appraisal and a legal description of the property, such as a title report. We work with many appraisal companies. Even if the loan is to be made with a relatively large down payment, in most cases we may still want the property appraised.

The Lock Process

Sometime before your loan documents are drawn, you will ``lock in'' a rate for your loan with us. The purpose of the lock is to allow you a loan at the ``locked-in'' rate if the loan closes before the lock period expires, even if rates are higher at the time of funding.
This could be offered at the application, upon approval, or anywhere in between. We give you the choice of when to lock.
Typically the shorter the time period between your lock and the actual closing the cheaper the interest rate or points.

This could be offered at the application, upon approval, or anywhere in between. We give you the choice of when to lock.
Typically the shorter the time period between your lock and the actual closing the cheaper the interest rate or points.


The Approval Process

During the ``processing'' and/or ``underwriting'' period, your credit, assets, income and other determinants are checked and compiled. At the end, your loan is either approved with conditions, approved without conditions or rarely declined.

Sometimes a loan is labeled suspended which while sounding harsh, is simply another way of saying that we require more information to decide. Don't be alarmed if your loan is suspended, this is not necessarily a step towards being declined. Usually you can submit additional documents and turn a suspension into an approval.

Conditions are further documentation or checks that we may need to complete to finalize your loan before funds can be dispersed. Many borrowers become frustrated by conditions that surface at the end of a loan transaction and can't understand why they are being raised so late. This is because the loan may go through several review processes prior to actual funding, because of incomplete information.

Just work with the us and remember, the process is not perfect and we are simply trying to meet conditions imposed by standard underwriting requirements. Since loans these days are sold and serviced by other parties, we must verify that the loan will be salable upon closing. Whether or not your loans is serviced by us or a new party shouldn't matter, your payment will simply be made to the new institution. No other terms of your loan can be changed after you have signed your final loan documents.

When all conditions are met, your loan documents are drawn up and forwarded to the place of settlement or closing.

Do not make any adverse changes to your financial ``picture'' during this delicate time between approval and when funds are dispersed. Believing the ``approval'' is the final stage or that we won't find out about the change in debt or income or other factors can lead to real headaches. Innocent mistakes range from applying for a new department store credit card to purchasing a refrigerator for the new house, to buying two new Mercedes Benz sedans, to quitting a job to go full time into a new business. These changes will at least force an explanation to be given and at worst may cause your loan not to fund and the approval to be withdrawn. we may obtain another credit report and call your employer one last time before funding the loan.

Simultaneous to funds being dispersed, an instrument is recorded at the county recorders office to give us security to your property.
To summarize, there are many ways to approach your home financing process beginning with the source that you choose to borrow from. The advantages of working with FHA Mortgage Broker Online on the Web are substantial. Understanding the loan process can minimize the likelihood of frustration during the loan transaction.

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