Davidson Realty, Inc.

Realtor Loreal Greathouse Gives Tips on Understanding the Loan Application & Underwriting Process

July 15, 2015

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Posted by in News

Understanding the home loan application process can be intimidating even for someone like me who deals with it on a weekly basis. Here is some advice from the pros at Bank of England in Jacksonville.

Florida’s real estate contracts require the buyer to complete a mortgage application with a lender within five days of the offer being accepted by all parties. This means you will need to meet with your lender and bring all required documents within five days of everyone signing the purchase and sale agreement.

You should plan to bring:
• Income documentation, such as tax returns and pay stubs
• Copy of bank statements or other asset statements
• And other documents for review, which may vary depending on your specific scenario.
During this meeting you will be signing a lot of documents and reviewing the details of the mortgage loan (interest rate, terms, and so forth).

Lenders are required to ensure clients are able to pay back the monthly mortgage payment along with your current debt as reported to the credit bureaus (Experian, Transunion and Equifax), something known as the Ability to Repay. Collectively, this means pulling your credit report, reviewing income and debts, as well as asset statements to get an overall picture of your ability to repay the mortgage. Occasionally, something on these documents may require further documentation, such as a large deposit unrelated to normal employment pay on a bank statement. This is to ensure the deposit was not a loan, which would add to the debts, again going back to the ability to repay.

After this initial meeting your lender will prepare your file for underwriting. Some clarifying documentation may be required. Once the underwriter provides a “clear to close”, the final HUD-1 Settlement Statement will be prepared, which is a final breakdown of the mortgage loan, including all fees, inspections, etc., but most importantly the final amount of funds needed for closing.

I hope this explanation helped you understand the process a little better, remember, throughout the process, do not hesitate to ask the lender questions. They are a resource for you to ensure your goals are met and that you understand your mortgage.

For more information on Jacksonville Real Estate or the home loan process, give Loreal Greathouse a call at (904) 940-5000.

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