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Loan Process

Prepare Now for Your Mortgage App!

This is the fourth post in a nine part series on the mortgage loan process.

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Having your bank account statements in order and avoiding the deposit traps will help to assure a smooth mortgage application and approval process.

Always provide ALL numbered pages of each account statement. “Page 1 of 8” may be nothing more than a cover sheet. Unfortunately, underwriters don’t know that unless they see it.

Document the source and purpose of deposits not clearly identifiable as being from your employer.

Make copies of all checks and deposit slips and keep them together in case they’re requested.

Track transfers, too. We’ll need statements for both accounts involved. If it is a gift from a family member, please consult with us for the proper process to follow.

Don’t deposit currency and checks together, as this will be hard to document. It’s best not to make cash deposits unless you can clearly document the source of the funds.

Following these steps will make it easy to prove that funds going into your accounts are not borrowed. Even private loans have corresponding payments, so underwriters have to be certain to account for all debts.

When in doubt, remember we’re here to answer your questions.

What is a Good Faith Estimate, Anyway?

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It’s always made in good faith, but it’s not really an estimate; it’s held to a higher standard. This is the third part of our nine part series on the loan process.

The Good Faith Estimate (GFE), which you will receive within three business days of applying for your loan, shows closing costs and pre-paid expenses due at closing.

Closing costs include all expenses associated with obtaining the loan, such as lender fees, title insurance, inspections and other charges.

Pre-paid expenses are related to your ongoing cost of homeownership. Examples include reimbursements to the seller for pre-paid taxes; funds to establish your escrow account for taxes and insurance; or a partial month’s interest expense.

Limited adjustments to the GFE are allowed. The “Origination Charges” listed on your GFE cannot change unless there is a “change of circumstance.” In this event, you will receive a new GFE.

Certain fees can increase by no more than 10% at settlement. Examples include government recording charges; title charges from companies we identify; and vendor services we select, such as appraisals and credit reports.

Other charges can change. These include required services that you select from companies we did not identify, such as title services and homeowners insurance. Daily interest charges and the initial deposit into your escrow account to cover taxes and insurance can also change.

If you have questions about GFEs or the mortgage process, please give me a call. I’m happy to help.