For most people, buying or refinancing a home is the biggest financial transaction of their life. We don't think it needs to be the most complicated, too. Yes, there are several moving parts that must come together in a successful mortgage transaction, however, by having a basic understanding of who's involved and what to expect, the process becomes more clear. Yes, everybody's situation can be slightly different and the process isn't always cut and dry. What you read below is a general guideline about how the purchase process works. We are here for you every step of the way!
Once you've determined that you're ready to purchase or refinance, simply give us a call at 888.450.FIRE (3473) or submit your inquiry.
One of our Firefighter Mortgage Consultants (A.K.A. a Mortgage Loan Originator/ MLO) will be assigned to help you, depending upon the state where the property is located.
Your MLO will initially be looking at three main criteria to determine readiness; we call this the Mortgage Tetrahedron. Just like the Fire Tetrahedron demonstrates the need for oxygen, fuel, and heat (and, of course, a chemical reaction) as key elements for a fire to occur, the Mortgage Tetrahedron demonstrates the need for income, a favorable credit history, and a (minimum) down payment to qualify for a home loan.
It is important to remember that your situation doesn’t need to be perfect in every aspect of the Mortgage Tetrahedron to qualify for a mortgage, it just needs to meet the qualifying criteria. This is something your MLO will gladly discuss with you and guide you through. These factors will also help determine which mortgage program or programs will be most suitable for you.
Once you have an idea as to which program you'd like to choose, we'll need to complete the uniform residential loan application (we call it a 1003). Information collected includes and is not limited to: type of mortgage program, 2 years of employment history, 2 years of residence history, credit information, current income, bank account information, etc. This may be done securely online or over the phone. The information submitted will need to be supported by documentation.
The list below represents what it generally requested. Knowing this upfront will help you be better prepared.
- Current Pay Stubs (Most recent 30 Days worth of paystubs)
- Last 2 Years W-2s and/or 1099’s if applicable
- Tax Returns For The Past Two Years - Including All Schedules With Any Associated W-2s, K-1s, Or 1099s
- Bank Statements For The Past Two Months - All Pages
- Investment Account Statements For The Past Two Months - All Numbered Pages
- Retirement Account Statements For The Past Two Months - All Numbered Pages
- Copy of Driver’s License For All Loan Applicants
- Credit Card Information For Appraisal Order
- Executed Purchase Contract (For Purchase Transactions)
If you currently own Real Estate
- Copy Of Most Recent Mortgage Account Statement For All Properties Owned.
- Home Insurance Policy Information
- Home Equity Account Information (If Applicable)
- Copy of Property Tax Bill For the Most Recent Year
Once you've submitted your complete application, a Loan Processor (processor) will be your main contact for the next steps and through to the end of the mortgage process. Your MLO and our office support staff will also be available for you throughout the process.
Your processor will review your information and ask you for anything additional that's necessary to complete your application file. At this point, a property appraisal is usually scheduled with a third-party appraisal management company.
If you're purchasing, the appraisal appointment will be made with an access person; it may be the seller or a real estate agent working on the transaction. The appraisal is the only item we collect payment for upfront and it goes directly to the appraisal company. This is usually done with a credit card. Your MLO will let you know the the exact cost based on property type and location. For a single family property, an appraisal is (give or take) $400.00. This is FYI only as we do not set the price.
In addition to an on-site inspection of the property, the appraiser does detailed research about comparable properties in the area, current market conditions, and examines a number of other factors to determine a fair market value. The report is sent to your processor who can then share the report with you.
Although it's not usually a requirement of the qualification process, we strongly recommend that you enlist the services of a reputable home inspector- not to be confused with the appraisal inspection- to thoroughly examine the structure and all of its systems to identify any potential issues. This may be done prior to or after the appraisal. Please ask your MLO or real estate professional for their recommendation on the timing.
Once everything is in order, your processor will submit your information to a mortgage loan Underwriter who will carefully review your documents and information. It's possible that the underwriter will request additional information and/ or verification of some of the items in your file. This part of the process may require some back-and-forth to ensure that all program, lender, and government guidelines have been met.
After all the guidelines have been met and all information has been verified, your file will be issued a Conditionally Approved status. One condition that we may still be waiting for at this point is the a clear title report. A Title Agent will research to ensure that you have a clean title , i.e., so that no other person is claiming ownership rights to the property. The title agent is usually chosen by a real estate agent, attorney, or lender (in the case of a refinance). You may also choose your own. The agent will issue an insurance policy against losses in the event that it is determined in the future that there is another rightful owner to the property.
After everything checks out, we will hear one of our favorite phrases, Clear to Close. Once this is issued, your loan processor can schedule the closing and the signing of the final documents.
Your Closing Agent (we also refer to them as a title closer or closer) handles the final phase of your financing, referred to as the closing. This agent ensures that all documents in your loan and in the closing of the house are correctly executed and that all parties involved fully understand the details of the transaction. Your closer then records the transaction in county records and facilitates the movement and release of funds.
The Closing process is the final step in the process where the buyers and sellers sign their respective documents and your loan is funded.
Congratulations! You're a homeowner!
Still have some questions? Just visit our FAQs page or give us a call at 888.450.3473