This is Part 2 in a series of articles to help you better understand the home mortgage loan process. If you’ve not done so yet, we recommend that you read Part 1 first, and then come back and continue reading this article.
Welcome back! If you’re reading this, chances are congratulations are in order and you’ve submitted an application to Eaton Federal Savings Bank for a mortgage and you’re on your way to being a homeowner. Now it’s time for our team of mortgage loan professionals to take over. Read below for an outline of the steps your mortgage loan application will travel through before closing.
In Part 1, we talked about Getting Started and The Application Process. In this article, we’re going to dig a little deeper into the information we require for the loan to be processed, as well as what happens if your loan is approved and what’s involved in the closing process. Let’s get started…
Documentation and Required Forms
- While your financials are being reviewed by our team, we will send you a Loan Estimate, and your Intent to Proceed documents. The Loan Estimate is a tool to help you, the borrower, understand the costs involved when borrowing money. It will also include a payment estimate and an Annual Percentage Rate which can be used to compare the overall loan package (rates and fees) with other lenders. The Intent to Proceed document serves as the bank’s proof you have received the Loan Estimate and you wish to continue with your loan request.
- Once we have received your Intent to Proceed document, your loan officer may request payment of the appraisal fee. The amount will be listed on the Loan Estimate.
- The appraisal is ordered from a local appraiser selected at random from our list of approved appraisal firms. The appraiser makes arrangements with the current home owner (the seller) to enter the property for the valuation process. Pictures and measurements are taken inside and out to compare amenities with similar houses in the same general area which have sold recently. The appraiser will use this information to estimate the value of the house you want to purchase. This process usually takes 7-10 business days depending on availability and scheduling.
- Once the appraisal has been completed, it will be reviewed by your Eaton Federal mortgage loan officer and sent to you. Provided the appraised value is not less than the agreed purchase price, your loan officer will submit the whole package of documents (application plus tax returns, etc.) to the bank’s underwriters for a final decision to approve or decline the loan. This may take a few days depending on the backlog of applications the underwriter is working through.
Approval and Preparing for Closing
- If the decision is favorable, a commitment letter is generated with Eaton Federal’s official offer and terms to lend funds.
- You will have 10 calendar days to decide whether or not to accept our offer. Please read the offer carefully to make sure you understand all of the terms and conditions of the mortgage loan you have been approved for. If you do not understand something, feel free to contact us to answer any questions you may have.
- If you decide to accept Eaton Federal’s offer, you will be asked to provide a commitment fee signifying you are ready to proceed and consummate the loan.
- A Closing Disclosure will then be generated, and either mailed or hand delivered to you. A closing may only take place after 5 business days have elapsed if mailed, or 3 business days have elapsed if hand delivered.
- After the mandated time has passed and Eaton Federal receives your commitment fee, we will generate the necessary closing documents and coordinate a closing date and time with the title company, your loan officer and you.
- A loan closing generally takes between 1-3 2 hours and will require many signatures, along with copies of your identification.
- The entire process can takes less than 30 days to complete; however, during busy buying/selling seasons mortgage loans can take as long as 45 days.
Now it’s truly time to celebrate! The mortgage loan process is over. With the keys in your hands and copies of the signed documents, you are the proud owner of a new home. At Eaton Federal Savings Bank, we are thankful you allowed us to be part of this incredible time in your life. Enjoy your new home, but don’t forget we’re here to take care of all your other banking needs too! We’ve got a great lineup of checking accounts, investment options and all the technical conveniences you’ll find at the bigger banks (like online banking, mobile banking apps, mobile deposit, etc.), but with the personal touch and hometown attention you deserve.
Watch Out for Road Blocks!
To help ensure we’re both doing our part to keep the loan process “on track,” we want to remind you to check out the past post, Avoid These Home Mortgage Loan Road Blocks! which will help keep you alert you to any potential issues that may come up during the approval process.
Be sure to come back to our Blog to learn more and get some useful tips on keeping the loan process on track! You can also leave us comments below to let us know what you think... we'd love to hear from you.