“Behind the scenes” look at your mortgage being processed:

Posted by David
July 23, 2006
Today, I wanted to give you a bit of a "behind the scenes" look at how your mortgage is processed. A lot of American consumers seem to be unaware of the amount of overhead and problems involved for lenders when trying to close a mortgage.

I do not intend for this piece to be a sob story to get you to feel sorry for me or other loan officers. However, I think if all the parties involved with a real estate transaction are made aware of how complex the process is to obtain financing, they tend to be a little less "pushy" in trying to get transactions completed in unrealistic amounts of time.

Below are the steps for completing a standard 30-year fixed-rate mortgage. These steps vary by loan program, but we will stick to the basics, for now:

1) Complete mortgage application with your loan officer
2) Your loan officer obtains automated approval for your mortgage via a computerized approval system
3) Income verification (usually, paystubs, W-2 for the last two years, and/or tax returns)
4) Asset verification (usually, bank statements for all accounts listed on the application, and statements for all retirement or stock accounts listed on the application)
5) Employment verification (your employer is either faxed a form they must complete to verify your employment and income at your current job, or they are contacted by telephone and asked to verbally verify your employment)
6) Appraisal (to verify the property is worth as much as you have agreed to pay)
7) Title examination for the property (basically, an examination of public records to verify that all taxes and loans against the property are paid satisfactory)

Only seven steps. Sounds easy, right? Think again. The potential for problems when completing these steps is fairly extensive. I will elaborate on those in my next article. Without going in to too much detail here, it is safe to say that good credit scores, good income, and lots of money in savings do not guarantee that your transaction will be "easy" to complete...
Home Mortgage Loans

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