Choosing a lender | Making
an application
Getting the loan approved | Conducting the closing
Getting a mortgage can be a pleasure or a nightmare. It starts with that first phone call to a lender and ends at closing on your new home. Here are the four stages of the mortgage process, and what you should do to make the experience as painless as possible.
Phase 1: Choosing a
lender
You can select among banks, mortgage bankers and mortgage brokers. The last doesn't supply
the funds for your loan, but has a list of money sources. Base your selection primarily on
cost and references. The lender should have competitive rates and fees and be recommended
by someone whose judgment you trust. Many states require lenders to be licensed, but
that's no guarantee they will be highly professional. Ask for references.
Phase 2: Making
an application
This is more complicated than you might think. The lender probably will ask you pay up
front for an appraisal and credit report, and will require many documents, such as proof
of income and bank account statements. In return you'll get a ton of paper back, much of
it disclosures required by law. Forms must be completed and signed. You'll have to wade
through them, especially the good-faith estimate of expenses related to the mortgage. Read
everything carefully, ask questions and challenge any charges you think don't make sense.
Phase 3: Getting the
loan approved
Murphy's law applies here. You may encounter glitches, such as errors in your credit report. Lenders might lose important papers, forget to order
inspections or just get bogged down with too many customers. It's up to you to keep the
process going. Check with your loan officer at least once a week to see that you are on
schedule for closing. Keep your own checklist of what the lender should complete and by
what date.
Phase 4: Conducting
the closing
This can be painless or painful, just like the other steps. The signing of the
final paperwork can take place in a lawyer's office or at a title company, depending on
where you live. You, the seller, real estate agents, the lender and any other interested
parties will attend. Again, papers must be signed. Read them carefully. The lender could
make a mistake on the paperwork, even about the loan check amount.
Diligence and a little luck will make your mortgage application go smoothly. Be persistent when you encounter glitches, and you should come out with a home and the right mortgage.
By Robert K. Heady, Tribune Media Services syndicated columnist