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Mortgage Basics

Mortgage is a method of using property as security for the payment of debt. Mortgages are also known as liens against property, or claims on property. To make it simple we can say that whenever a person takes a loan against his property that is called mortgage loan. Borrower will run the risk of losing the property, in case of default in payment of loan.

Mortgage Lifecycle
Following are high-level steps through which a Mortgage Loan passes during its life:

Hhigh-level steps through which a Mortgage Loan passes during its life

Loan Application
This is perhaps the most important part of the mortgage process. During this process your agent will ask for information pertaining to your income, assets and liabilities. Once this information has been collected a loan program that best fits your financial needs will be recommended. Prior to loan application you will need to determine the amount of down payment you will be making towards your new home and collect the following documents that should be brought with you when you make loan application:

Most recent pay slips for each borrower covering the most recent thirty-day period.
Two months of the most current and consecutive banks/investment/ retirement statements for all your accounts.
If self-employed you will need to bring in the most recent two years' tax returns. You will also need a year-to-date profit and loss statement.

Credit Report
A credit report will be obtained as part of the loan application process. The credit report will show your payment history, credit limits, monthly payments and current balances.
Verification
The HFC (Home Finance Company) will verify the information disclosed on your initial loan application (i.e. income, assets and liabilities).
Property Appraisal
The Mortgage Company or HFC will order a property appraisal from a licensed real estate appraiser on the property in which you are purchasing. The appraisal is done to determine the value on the property being purchased and your loan amount.
Underwriting
Underwriting is the process of deciding whether to sell a loan or not? This includes analysis of applicant creditworthiness and ability in repaying the loan. This also includes review of property value so that loan could be recovered in case of default. A loan decision will be issued based on four factors - income, assets, credit record, and property value. An Underwriter will review the information on your loan application and the information collected on your behalf. Additional information or documentation as required by the loan program guidelines may be requested.
Interest Rate
You have the opportunity to establish an interest rate guarantee or "lock" the interest rate during the process up to ten days before your closing. Keep in mind that interest rates may change somewhat each day. Only you can make the decision to lock the interest rate on your loan.

It is your responsibility to contact your Mortgage representative/agent to determine the interest rate and lock in your loan. Keep in mind that interest rates can change at any time and without notice.
Loan Closing
Loan closing means legal execution of the loan. Schedule a final walk-through of your new home before closing to make sure it is ready for you and to ensure that any contingencies specified in the commitment letter about the home's condition have been satisfied.

During closing, title passes from seller to buyer and lender establishes various legal default, collateral and repayment rights. Lender provides funds to borrower. Loan closing involves funding the mortgage loan, preparing closing documents, verification that all closing conditions are met and all required fees, charges collected.

Customer Service Evaluation
Customer satisfaction is very important. You will be asked to fill out a customer service evaluation regarding your mortgage experience. This information is used to refine the systems, processes, and employee training programs. Please give your inputs to help the continuous effort to improve customer satisfaction.

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Real Esate

Home Loans / Mortgage

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Harmonious Homes

Lifestyle

Home Improvement