The below is what a mortgage borrower should know about the steps in a mortgage process and what is expected of them when applying for a mortgage. The turn times and ability of the mortgage lender to execute these steps below will vary according to lender capacity and client deadlines.
Mortgage Loan Transaction Checklist
- Borrower to complete the formal loan application.
- Submit all supporting documents needed from here: purchase checklist or here: refinance checklist.
- Borrower not to make any large purchases, credit card transactions, or bank deposits during the process. Read this for more detail.
- Borrower should have received, signed and returned the loan disclosures.
- Confirm with the lender that the appraisal has been ordered.
- If the subject property is a condo make sure the lender knows the name and contact information of the property manager.
- Does the lender have your exact and accurate address history to order the IRS 4506 Mortgage form?
- Does your lender have an accurate social security number to order the Social Security Verification?
- Have you gotten the lender all of the supporting documents are needed? purchase checklist or refinance checklist.
- Is the lender ready to submit the loan for loan approval?
- Has the loan been thoroughly analyzed for:
-acceptable credit scores
-any large, unexplained deposits on bank statements?
-sufficient “cash to close”?
-any odd deductions on pay stubs?
-any gap in employment that is troubling? (60 days or longer needs to be addressed, 6 months or longer can be a problem).
-any credit blemishes or low credit scores that are a cause for concern?
-any appraisal repairs, value issues, or problem with comparables?
-if buyer self-employed do they show sufficient income on tax returns?
-if the subject property is a condo does everything related to the condo look satisfactory?
- Is the loan approved?
- Submit any loan approval conditions to the lender ASAP, same day or next day.
- If you have not done so already, start shopping for any necessary insurance required.
- Have you sent the lender a satisfactory homeowners insurance policy?
- If the property is a condo have you sent the lender a satisfactory HO6 insurance policy?
- Is satisfactory title work in?
If all of the above is done, you should now be ready to settle your loan closing, and have safely and happily traversed the mortgage process.