Loan Process - Stewart Brown Jr - Mortgage Loan Originator

My Process for Your Success

Understanding the sequence of events for your home buying journey is the critical first step

Check out my 18 milestones below to see what's in store and to help remove the mystery of home financing.

Begin here

1. CHECK YOUR CREDIT REPORT

2. SELECT YOUR LENDER

3. DETERMINE YOUR COSTS & PAYMENT

Run all 3 credit bureaus: Equifax, Experian and TransUnion. You need to verify: (1) your credit score is high enough to qualify for a loan and (2) your credit report is free of errors that could stop the mortgage process. There are loan programs that allow a FICO score as low as 500, but I recommend having a 620 or higher so you have more options available.

Ideally, you should shop 3 different lenders so you can see which lender you like working with and which lender can offer you loan terms that best suit your situation. It's wise to choose your lender at this stage so you don't have to worry about this step while under contract and strict deadlines.

Your lender will analyze your credit, income and assets to determine the maximum purchase price you can afford along with your monthly payment. Your Loan Officer will also go over closing cost and down payment.

4. SEND DOCUMENTS TO LENDER

5. SUBMIT LOAN APPLICATION

6. GET PRE-APPROVED

Now that you've verbally reviewed your financial information with your lender they will require you to submit your financial documents. These typically include 2 years of W-2s, paystubs from the last 30 days, ID, and 2 months of bank statements. If you are self-employed you will also need to submit 2 years of Tax Returns and a Y-T-D P&L Statement.

Your loan officer should have the bulk of your documentation at this point. They should now submit your file to Underwriting. The next step is receiving a Fully Underwritten Conditional Approval. Once received the borrower can start the fun part of hiring a real estate agent and searching for a home.

Now that you've provided all of the required documents to your lender, they can offer you a Pre-Approval. I take an additional step with my clients, I submit their loan application to obtain a Fully Underwritten Conditional Approval. I recommend completing this step before anything additional.

7. FIND A REAL ESTATE AGENT

8. SEARCH FOR A HOME

9. MAKE AN OFFER

Once you've been pre-approved, you will know exactly the price range of homes you qualify for. You'll now want to select a real estate agent who can help guide you through the purchase process and help you negotiate your offer with the seller and listing agent. If you'd like a jumpstart, I can connect with our my network of top agents near you.

Your real estate agent will help you search for homes based on your criteria such as type of property (single family home, condo, townhouse), how many bedrooms and baths, the school district, lot size, swimming pool or any other amenities. Your agent can help you set up showings where you can walk through a home before you make an offer.

Once you found a home you love, you can make an offer! An offer involves a purchase contract that details the terms of the sale. You get to propose sale purchase price, closing date, whether you want inspections, etc. The seller can accept, reject, or counter with their own terms. Ideally, you and the seller will reach an agreement on the terms of the sale. Once your offer is accepted you are now under contract and can move to the next step!

10. SEND EARNEST MONEY DEPOSIT

11. GET A HOME INSPECTION

12. REVIEW LOAN ESTIMATE (LE)

Most contracts include an earnest money deposit or EMD. This deposit requires the buyer to place a negotiated amount of money into an escrow account within a few days after the contract is signed by both the buyer and the seller. The EMD helps to show the seller how serious you are about their home and adds a level of financial guarantee that you will follow through on the contract. It is not an expense. It is money that is held by a 3rd party and applied to your closing costs at settlement.

No one wants to move in to a home that ends up needing thousands of dollars of unexpected repairs! A home inspection is optional, but it's the best way for buyers to get an expert 3rd party opinion on the condition of the home before they agree to purchase it. Even though you signed a contract with the seller to purchase their home, most contracts have an inspection contingency period (check with your real estate agent). This period is where you can choose to back out of the deal or request the seller to fix items in a home if the inspection report finds issues you are uncomfortable with.

Every lender in the U.S. is legally required to send you a Loan Estimate (LE) 3 business days after you are under contract for a home and have completed all parts of the loan application. Your LE will provide you an estimate of the fees and costs associated with purchasing your home. This disclosure will include not only lender costs but costs from different parties like insurance, title, escrow, county fees, transfer taxes, appraisal, credit report, property taxes, impound account establishment, etc. The Loan Estimate is a good faith estimate from the lender to give you an estimate of all these fees.

13. GET APPRAISAL ORDERED

14. GET HOMEOWNER'S INSURANCE

15. REVIEW REPORTS W/ REALTOR

Your lender will require and order an appraisal on the home. The lender will collect a fee from you upfront before they can order the appraisal. The appraisal verifies that the home is worth enough money to justify the amount being lent to you. The appraisal helps the lender safeguard their investment in you and the property. The appraisal is not designed to benefit you. It may tell you some helpful information, but it is mainly to serve the lender. After the appraiser inspects the home, the appraisal report will be sent to you showing the value and condition of the home.

At this point you will need to obtain homeowner's insurance. All lenders require homeowner's insurance during the entire time you have a loan. You can shop with different insurance companies to find a policy that works best for you. You will need to get an annual quote and then your lender will collect monthly payments from you in order to pay your insurance company annually.

Most contracts have an inspection contingency period where you have a certain amount of a time to get a home inspection and request repairs. Often, you can exit a contract with no repercussions due to the inspection report during this period. You will want to carefully review your inspection report and talk through it with your real estate agent. Figure out what repairs are important and are dealbreakers and which ones are not that big of a deal.

16. REVIEW CLOSING DISCLOSURE (CD)

17. SEND FUNDS DUE TO ESCROW

18. CLOSE OF ESCROW / SETTLEMENT

Your lender will provide you a Closing Disclosure (CD) before settlement. The Closing Disclosure is legally required to be given to you 3 business days before you're allowed to close on a home. A lender is required to re-issue a Closing Disclosure if there is a significant change e.g. the APR and fees increase. When you get your Closing Disclosure ask your loan officer if it is the final or if it is estimated. Compare your Closing Disclosure to your most recent Loan Estimate and explore if anything materially changed. Discuss these changes with your loan officer if you are uncomfortable with them.

Once you've reviewed your Closing Disclosure, you'll need to send your "Cash To Close" funds to the escrow company. Your loan officer will be able to tell you exactly how much you need to send. Usually lenders either require a cashier's check or wire transfer. Make sure to verify the wire information with a the escrow company over the phone and be on the lookout for wire fraud scams. Always confirm changing information with your loan officer.

You will meet with a notary public or attorney depending on your state of residency to review your final paperwork and sign to close on your new home! After signing your loan will be funded and you will get the keys from your real estate agent and will be able to move in!

My Process for Your Success

Understanding the sequence of events for your home buying journey is the critical first step

Check out my 18 milestones below to see what's in store and to help remove the mystery of home financing.

Begin here

1. CHECK YOUR CREDIT REPORT

Run all 3 credit bureaus: Equifax, Experian and TransUnion. You need to verify: (1) your credit score is high enough to qualify for a loan and (2) your credit report is free of errors that could stop the mortgage process. There are loan programs that allow a FICO score as low as 500, but I recommend having a 620 or higher so you have more options available.

2. SELECT YOUR LENDER

Ideally, you should shop 3 different lenders so you can see which lender you like working with and which lender can offer you loan terms that best suit your situation. It's wise to choose your lender at this stage so you don't have to worry about this step while under contract and strict deadlines.

3. DETERMINE YOUR COSTS & PAYMENT

Your lender will analyze your credit, income and assets to determine the maximum purchase price you can afford along with your monthly payment. Your Loan Officer will also go over closing cost and down payment.

4. SEND DOCUMENTS TO LENDER

Now that you've verbally reviewed your financial information with your lender they will require you to submit your financial documents. These typically include 2 years of W-2s, paystubs from the last 30 days, ID, and 2 months of bank statements. If you are self-employed you will also need to submit 2 years of Tax Returns and a Y-T-D P&L Statement.

5. SUBMIT LOAN APPLICATION

Your loan officer should have the bulk of your documentation at this point. They should now submit your file to Underwriting. The next step is receiving a Fully Underwritten Conditional Approval. Once received the borrower can start the fun part of hiring a real estate agent and searching for a home.

6. GET PRE-APPROVED

Now that you've provided all of the required documents to your lender, they can offer you a Pre-Approval. I take an additional step with my clients, I submit their loan application to obtain a Fully Underwritten Conditional Approval. I recommend completing this step before anything additional.

7. FIND A REAL ESTATE AGENT

Once you've been pre-approved, you will know exactly the price range of homes you qualify for. You'll now want to select a real estate agent who can help guide you through the purchase process and help you negotiate your offer with the seller and listing agent. If you'd like a jumpstart, I can connect with our my network of top agents near you.

8. SEARCH FOR A HOME

Your real estate agent will help you search for homes based on your criteria such as type of property (single family home, condo, townhouse), how many bedrooms and baths, the school district, lot size, swimming pool or any other amenities. Your agent can help you set up showings where you can walk through a home before you make an offer.

9. MAKE AN OFFER

Once you found a home you love, you can make an offer! An offer involves a purchase contract that details the terms of the sale. You get to propose sale purchase price, closing date, whether you want inspections, etc. The seller can accept, reject, or counter with their own terms. Ideally, you and the seller will reach an agreement on the terms of the sale. Once your offer is accepted you are now under contract and can move to the next step!

10. SEND EARNEST MONEY DEPOSIT

Most contracts include an earnest money deposit or EMD. This deposit requires the buyer to place a negotiated amount of money into an escrow account within a few days after the contract is signed by both the buyer and the seller. The EMD helps to show the seller how serious you are about their home and adds a level of financial guarantee that you will follow through on the contract. It is not an expense. It is money that is held by a 3rd party and applied to your closing costs at settlement.

11. GET A HOME INSPECTION

No one wants to move in to a home that ends up needing thousands of dollars of unexpected repairs! A home inspection is optional, but it's the best way for buyers to get an expert 3rd party opinion on the condition of the home before they agree to purchase it. Even though you signed a contract with the seller to purchase their home, most contracts have an inspection contingency period (check with your real estate agent). This period is where you can choose to back out of the deal or request the seller to fix items in a home if the inspection report finds issues you are uncomfortable with.

12. REVIEW LOAN ESTIMATE (LE)

Every lender in the U.S. is legally required to send you a Loan Estimate (LE) 3 business days after you are under contract for a home and have completed all parts of the loan application. Your LE will provide you an estimate of the fees and costs associated with purchasing your home. This disclosure will include not only lender costs but costs from different parties like insurance, title, escrow, county fees, transfer taxes, appraisal, credit report, property taxes, impound account establishment, etc. The Loan Estimate is a good faith estimate from the lender to give you an estimate of all these fees.

13. GET APPRAISAL ORDERED

Your lender will require and order an appraisal on the home. The lender will collect a fee from you upfront before they can order the appraisal. The appraisal verifies that the home is worth enough money to justify the amount being lent to you. The appraisal helps the lender safeguard their investment in you and the property. The appraisal is not designed to benefit you. It may tell you some helpful information, but it is mainly to serve the lender. After the appraiser inspects the home, the appraisal report will be sent to you showing the value and condition of the home.

14. GET HOMEOWNER'S INSURANCE

At this point you will need to obtain homeowner's insurance. All lenders require homeowner's insurance during the entire time you have a loan. You can shop with different insurance companies to find a policy that works best for you. You will need to get an annual quote and then your lender will collect monthly payments from you in order to pay your insurance company annually.

15. REVIEW REPORTS W/ REALTOR

Most contracts have an inspection contingency period where you have a certain amount of a time to get a home inspection and request repairs. Often, you can exit a contract with no repercussions due to the inspection report during this period. You will want to carefully review your inspection report and talk through it with your real estate agent. Figure out what repairs are important and are dealbreakers and which ones are not that big of a deal.

16. REVIEW CLOSING DISCLOSURE (CD)

Your lender will provide you a Closing Disclosure (CD) before settlement. The Closing Disclosure is legally required to be given to you 3 business days before you're allowed to close on a home. A lender is required to re-issue a Closing Disclosure if there is a significant change e.g. the APR and fees increase. When you get your Closing Disclosure ask your loan officer if it is the final or if it is estimated. Compare your Closing Disclosure to your most recent Loan Estimate and explore if anything materially changed. Discuss these changes with your loan officer if you are uncomfortable with them.

17. SEND FUNDS DUE TO ESCROW

Once you've reviewed your Closing Disclosure, you'll need to send your "Cash To Close" funds to the escrow company. Your loan officer will be able to tell you exactly how much you need to send. Usually lenders either require a cashier's check or wire transfer. Make sure to verify the wire information with a the escrow company over the phone and be on the lookout for wire fraud scams. Always confirm changing information with your loan officer.

18. CLOSE OF ESCROW / SETTLEMENT

You will meet with a notary public or attorney depending on your state of residency to review your final paperwork and sign to close on your new home! After signing your loan will be funded and you will get the keys from your real estate agent and will be able to move in!

Understanding the sequence of events for your home buying journey is the critical first step

Check out my 18 milestones below to see what's in store and to help remove the mystery of home financing.

10. SEND EARNEST MONEY DEPOSIT

11. GET A HOME INSPECTION

12. REVIEW LOAN ESTIMATE (LE)

Understanding the sequence of events for your home buying journey is the critical first step

Check out my 18 milestones below to see what's in store and to help remove the mystery of home financing.

10. SEND EARNEST MONEY DEPOSIT

11. GET A HOME INSPECTION

12. REVIEW LOAN ESTIMATE (LE)

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