Once you are preapproved and have found a house to buy, the process doesn't stop! After your purchase agreement is accepted, you will want to have an inspection on the home to make sure everything is in order. Once you have accepted the inspection, your lender will move forward with your file. They will order an appraisal and title work.
You need to sign several disclosures and will get a good faith estimate and truth in lending in the mail. With the GFE and TIL, you may get some type of "Intent to Proceed" disclosure that you will need to sign and return. This form is new and so you need to look for it. Not every lender may require it. Two forms that are typically signed in the beginning are the 4506T and a social security verification. In the past the 4506T was not always signed at application, but used more at closing in case the investor audited the file. Now most lenders require us to pull the tax transcripts to show that the tax returns that are filed with the IRS are the same as the tax returns in the file. We also need to verify that the social security number we are using for your credit report, etc is your social security number. It is very important to make sure those forms get back to your lender as soon as possible as it can take a few days to get that information back to us from the IRS.
If your loan officer calls you and requests information, the sooner you can get it back to them the better. Usually the processor will go through the file and make notes on what is needed. Either the loan officer or the processor will call you looking for any missing documentation. The file cannot go to underwriting until that information is in. The longer it takes for you to respond with all the information, the longer before you can get to underwriting and the more chance that your file doesn't get to closing on time.
Sometimes you will need to provide an additional paystub or maybe a letter of explanation regarding something on your credit report or maybe about your income. Maybe they just want some clarification about something on your loan application. Just remember that you are not the only file that the processor has and they are trying to get through each file in a timely manner. A few years ago, it was fairly simple to process a file, but now due to new regulations, it takes much more time to go through each file. The more often a processor has to touch your file, the longer before you can get to underwriting.
You will need to contact your insurance agent and get homeowners insurance. Make sure you start that process early. It usually doesn't take too long to get the insurance binder, but every situation is different. You may also want to shop for insurance and that will take some time. Your mortgage company will need your insurance binder before they can do a closing package and ideally before the file is underwritten.
Once your file is approved, the closing department will work on getting your package to the title company for closing. If the property you are buying is a foreclosure, the seller's title company may need up to 5 days to get the settlement statement approved. The mortgage company will also do an employment verification and credit report update to make sure there are not any changes just before closing. Make sure you don't open any new credit cards, take out any new loans and make any employment changes. Any of that activity could cause your loan approval to change to a loan denial.
At closing, you will sign all the documents that put you into title and officially make your new home yours!! You will need to bring a picture ID and also a cashiers check made out to yourself for the amount of money needed at closing. Your loan officer will let you know how much money you need at closing. If there are any closing conditions, your loan officer will let you know what to bring.
