If you’ve never been through a mortgage application process, or maybe it’s been a long while, you may be approaching it with some trepidation. The very idea of a stranger digging through details of your life history and finances can feel a bit invasive. While the process (and hence, your experience) will vary greatly depending on the lender you decide to go with, here’s a rundown on the process you should expect when you choose the TLC Group at Canopy Mortgage, Home of the Mortgage Dogs!
- Schedule a call with your loan officer
- Complete the application
- Get pre-qualified
- Get pre-APPROVED
- Under Contract
- APPROVED
- CLEAR TO CLOSE
- Close and fund – You are now a homeowner!
Below are the details involved in each step. I will be by your side throughout the entire process, and act as the communication hub to all parties involved.
Step One: Schedule a Call with your Loan Officer
While some people opt to jump right in and complete an application immediately, I prefer to schedule a short video call beforehand to get to know about you and your individual scenario, while also introducing myself and our loan process. When we finish this initial call, you will have a clear idea of what to expect as we move forward in your mortgage loan process, which can go a long way in alleviating the stress that tends to come with uncertainty.
Step Two: Complete the Application
Canopy Mortgage boasts an award-winning propriety loan operating system that is user-friendly and transparent. If you do encounter any questions while completing your application, I will be available to help you through it.
Step Three: Pre-Qualification
Once the application is completed, I will review your file and issue a pre-qualification. This step will show you the best loan product for your profile, a maximum loan amount, interest rate (based on that day’s pricing only – we cannot lock in a rate until you are under contract) and estimated closing costs.
While technically you could start your home shopping journey with just a pre-qualification letter, in this market your realtor will likely insist on an official pre-approval. For an in-depth explanation on the difference between these two statuses, click here. The quick explanation is this: a pre-qualification means your loan officer has reviewed your file and approved you based on the assumption that your application is accurate and thorough. A pre-approval means an underwriter has verified through the appropriate documentation that you are approved for the terms provided, and all that’s required now is to approve the property.
Step Four: Pre-APPROVAL
As outlined above, having a pre-approval means you have gone through the underwriting process, have gotten the stamp of approval from an underwriter, and now your lender will only need to approve the property for you to be on your way to the closing table! In this competitive market having a pre-APPROVAL letter tells the seller you are ready to go, and much less likely to encounter any lending issues that could delay or negate the transaction. This moves your offer into higher consideration over those with only a pre-qualification.
For this step, you’ll provide a short list of documents for the underwriter to review. This list will vary based on your profile, but we make a point to review your file up-front and only request what is needed. Some lenders don’t take the time to do this step and will send you a laundry list of required documentation that may not even be necessary for your situation.
A basic list for someone who is not self-employed, and doesn’t own any additional real estate will be as simple as the following:
- Government-issued ID
- Two most recent pay stubs
- Last year’s W2 form
- Two months of bank statements for any funds involved in the transaction
Within 24-48 hours of receiving this documentation, you will be issued a pre-approval!
Once armed with your pre-approval, you and your realtor start the work of finding your perfect new home that fits within your approval parameters. Along the way you may swing back to me for numbers specific to properties you’re interested in. I will run an estimate of the monthly payment, as well as closing costs, so that you can make your best offer with the confidence of knowing what you’re getting into for the long-term.
Once your offer has been submitted and acknowledged by the seller’s agent, I will ask your realtor to tag me in. On my call to the seller’s agent I will assure them of your strength as a buyer, and that you have already been pre-approved by our underwriter. I let them know we are ready for a quick and smooth closing! I find this step can often seal the deal for my clients, as most loan officers do not offer the level of communication you can expect from myself and my team. Communication is key to keep transactions low stress for all parties involved.
Step Five: Under Contract
Congratulations! Your offer was accepted, and you are now “under contract” to buy your new home! Your realtor will get me a copy of the executed contract and my team will hit the ground running. You and I will go over the specific numbers related to this purchase and decide whether it’s time to lock in your rate, or if we’ll “float” to wait for a pricing improvement. Either way, you’ll review and sign the initial loan disclosures, after which my team will get your appraisal ordered and get your file back in front of the underwriter to review your contract and approve the property.
Step Six: APPROVED!
Within 24-48 hours of submission back to underwriting you will have your initial approval back. At this stage I will update all parties as to your approved status (you, your realtor, and the seller’s realtor) so that everyone knows we are on track for a smooth, stress-free closing! We will typically issue your initial closing disclosure (ICD) at this stage, so that the closing timeline clock starts. The ICD must be signed at least three business days prior to closing. We get this step out of the way early so that it can never cause a closing delay.
Within 7-10 days your appraisal report should come in, and again I will update all parties that we are clear on the valuation. Should the appraisal come in below the sales price, which can happen depending on market conditions, I will get on the phone with your realtor for a strategy session, and they will begin negotiations with the seller’s agent to find an amicable outcome. Meanwhile, you and I will go over the various potential outcomes so that you know what your options are, and what the short and long-term impacts may be. While stressful in the moment, an appraisal coming in below sales price often results in a better outcome for the buyer – if a compromise can be reached. A skilled and experienced lender-realtor team is crucial to this positive outcome.
Step Seven: CLEAR TO CLOSE!
Once my underwriter has reviewed all the required documents he will issue a “clear to close” status on your loan. This status means we are ready to close! At this stage I will check in with you to see if there is interest in closing early, and if so, I will reach out to your realtor and have them check in with the seller side. We will close on the date that all parties agree to.
Step Eight: Close and fund – You are a HOMEOWNER!
Prior to closing day, I will go over the final closing disclosure with you in detail to assure you arrive at the closing table without questions or concerns. In addition to this final closing disclosure, the title escrow agent will go over several other legal documents with you to make sure you are fully aware of your rights and obligations on your new mortgage. If I cannot be there in person, know that I will make a point to be available by phone should any questions arise.
Once both buyer and seller have signed all their documents, you are CLOSED. Those documents are then uploaded to our attorneys, and once they confirm that everything has been completed to their satisfaction, the approval to release funds is given. Now you are FUNDED! The title company will next file your deed with the county and you are a HOMEOWNER!!
Congratulations! *insert celebration here* Wooooo-Hooooo! *clink*
Our lender-client relationship does not end after closing. I strive to be a continued resource to you throughout your homeownership journey. Expect to hear from me from time to time, and never hesitate to reach back out to me for anything related to your home or mortgage.
