Complete the application before the offer is
made.
This can be accomplished a couple ways: Call
me and I ask forty questions. Then I email forms to sign. A mortgage
application is completed in-person, by telephone, online, by an online
application, email and any combination of communication. Prepare all income,
asset, and identification. It is important to open email daily and respond to
phone calls in an hour. This transaction takes concentration and caring.
Paperwork must be totally clear to read the account numbers, and the fine
print. If the Borrower doesn’t have a scanner available. I will loan one.
Taking a photograph with a phone is going to result in frustration as the image
comes out blurry, dark or curled. Download bank statements, save as and give it
the month and initials of the bank, and save to the desktop to email clear pdf
copies. E
“Prepared” means having employment and address
information for the past two years. Lenders need employer’s and landlord’s
contact information; bank, retirement, and investment account statements- every
page (including last one with nothing written) for the past 60 days; proof of income,
which is past 30 days pay stubs and two years W-2 forms or is self-employed two
years IRS tax returns.
With this information we may be able to
provide a written “preliminary approval”, all supporting paperwork and
documentation is verified and vetted.
After preliminary approval is issued, a mortgage
banker may ask for other paperwork which proves the information shared as part
of the application.
Additional paperwork may be needed such as: copies
of business licenses, gift letters for down payments, student loan terms,
bankruptcy docket summary, an perhaps letters explaining any name variety
(often married and maiden or initials in the name differ), any money deposited
larger than $500.00 or “large, atypical
deposits” in the bank account will need to be “sourced.”
Once the lender has reviewed and “signed off”
on paperwork, it will issue a pre-approval letter.
A pre-approval letter is proof that the loan
can be approved, so long as the property purchased meets lender
guidelines, and so long as Borrowers don’t make any “material” changes to the
application. Do not purchase or finance anything such as furniture or a new
vehicle during this time. Borrowers should not quit employment during this
time.
IF the loan is a purchase, Borrowers receive
an email disclosure of all the costs. It is important that Borrowers open and e-sign
the acknowledgement that they have read all the documents. The e- signature
process is very important, it is a time clock that runs with calendar days of
the transaction. Failing to e-sign causes delays. This first disclosure is
called a Loan Estimate.
After Borrower e-signs the disclosures the
lender collects credit card information to order the appraisal. Lenders cannot
speak to appraisers. The Lender orders the appraisal through an outside
company. This appraisal management system puts the property out for bid to
locate a local appraiser willing to accept the work.
Locking the loan or changing any terms of the
transaction cause for re- disclosing and repeat the e-signing.
Buyer agent and Listing agent should be notified
by lender of contact person for the appraisal. Listing agent is responsible to
provide comparable sales in the past three months of similar square footage in
writing to the appraiser’s hands. Listing agent also must make certain all
health and safety code violations are corrected BEFORE the appraiser sets the
appointment. Lack of carbon monoxide detectors, improper water heater straps
and broken windows are health and safety code violations. These must be fixed
before appraiser appointment to avoid delays.
After the appraisal is completed, the buyer
receives an email copy of the report then after, the report is emailed to the
Lender. The lender double-checks the
information and may notify Buyer agent of any issues.
At this point hazard insurance policy should
already be at escrow with the lender’s loss payee clause.
Lender communicates with escrow to complete
the final numbers and issue a Closing Disclosure. This Closing Disclosure is
emailed and must be e-signed as soon as possible. This will give the buyers the
amount they need to wire to close.
Wiring funds must be taken with utmost care.
There are bad actors out there who can email the incorrect account to wire to
and they can steal funds. Triple check the account information by calling the
escrow officer. The buyer goes to the bank to wire the total closing costs, (often
with a pad of $300.00) into an escrow account with the title company.
An appointment with a notary is set up with Borrower
personally for signing the final set of mortgage documents. These papers are
the same set as the Closing Disclosure, plus those from escrow, and any from the
contracts. A current driver’s license or passport, an hour, and Borrower’s thumb
for thumb printing. Borrower must send proof that the wire cleared one of the
accounts that the lender already reviewed. The online printout of the daily
balance showing the wire left the account must have the URL of the bank at the
bottom. This is accomplished by “save as” and giving a name then emailing to
the lender.
After Borrower (and spouse if not on the
transaction) have signed, and funds are cleared the lender reviews the
documents to make certain everything is signed properly, and they balance with
escrow.
After this the loan records at the county
recorder and the deal is closed.
Caroline Gerardo Barbeau
C G
NMLS 324982
(949) 784-9699
Caroline Gerardo
Barbeau's MySite - CMG Financial
