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Home Buying Basics: How mortgage loan process works.
Mortgage Loan Process The loan application that you have submitted goes through a process of review before the lender gives his or her approval. The lender appoints a person, who is known as underwriter, to judge your creditworthiness. The mortgage underwriter verifies your loan application and gives green or red signal to the lender. After the lender approves the mortgage, he/she decides upon the date of closing. The closing involves the signing of legal documents including a mortgage note which obligates you to repay the loan on time. At closing, the lender requires you to pay the costs of originating and processing the loan. You will also have to deposit property taxes and insurance premiums into an escrow account which ensures that these payments will be paid on time. The remaining part of the taxes and insurances are paid along with the monthly mortgage payments in order to protect the lender from tax liens and uninsured losses. To sum up, mortgage loan helps you in fulfilli...
Mortgage Basics: The mortgage underwriting process.
Mortgage underwriting is the process of evaluating a borrower's financial capacity to repay a loan. If you are a borrower, then the lender verifies your income, employment status, assets, credit standing etc and then determines whether or not you are creditworthy and are capable of paying off the mortgage loan. The work of an underwriter also involves an appraisal of the property value. Generally, lenders appoint underwriters to verify the information provided in your loan application and other related documents. They may also contact your employer to verify your role in the work area and your income at that position. Based on the evaluation, the underwriter decides whether the mortgage application should be approved or rejected. The mortgage loan underwriter also predicts the rate and term of the loan that are suitable for providing a certain loan amount. Usually lenders look into three areas before approving a loan amount. These include... Financial strength: Lenders take into ...
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