I'm Approved! Uh … Now What?
Congratulations, you’ve been approved for a mortgage. That’s no small feat these days. But now that you’ve made it over this hurdle, you should know what to expect throughout the rest of the process and what to expect as the closing date draws nearer.
Getting an approval on the mortgage really has two parts. The first part is receiving approval based on your own personal financial situation—which you’ve already done! The second part relates to the house that you are buying. Every mortgage approval has contingencies, or conditions, to meet before the deal can close. You will work with the loan officer to complete the closing process, while the lender acts as a liaison between you and all other parties to keep the process moving along. Receiving an appraisal on the home that provides the market value required is one of these contingencies, so obviously, it’s one of the first steps.
When you are purchasing a home, the appraised value must come in at the purchase price or higher. Otherwise, you’ll have to either renegotiate the price of the home or increase the down payment. For a home refinance, the appraiser schedules the appraisal appointment with you. If you are purchasing a home, then the appraisal appointment is scheduled with the current owner.
Appraisal copies go to the loan officer and your mortgage file so he or she can clear the contingency and continue along with the process.
Meanwhile, the title company is also working behind the scenes with the loan officer, researching the property records of the county where the home is so they can identify any mortgages, liens or claims of ownership that may exist for the property. This research ensures that, when you take ownership or title to the property, the title is “clean.” That means there are no other claims to ownership and that any liens or mortgages are cleared, so that the only loan collateralized by your home is the mortgage you’ve applied for.
The title company also provides title insurance. Once they have researched the title and lien history of the property, the company issues an insurance policy. Title insurance indicates that the title is clear at the policy issue date and protects you in case any title issues come up in the future.
The title work and policy copy are added to your mortgage file. The file is then sent back to the underwriter to clear this contingency and continue with the closing process.
Preparing for Closing
Before the closing date, there are tasks that will need to be fulfilled either by you, the realtor, or lender. A day or two before, and sometimes the day of closing, you will receive the preliminary HUD and notification of the amount of money you will need to bring in the form of a certified check to the closing table. Then, it’s time to attend the closing and take ownership of your home.