Before You Begin - The Initial Pre-Approval
Before you begin your home search it is necessary to obtain a pre-approval from a mortgage banker or broker. Your CT homebuyer representative can put you in touch with a list of broker affiliates that have established a proven track record of successful transactions.
Your CT Mortgage Broker or Banker will gather information about your income and debts and will perform a credit check. Based on your debt to income ratio’s and credit scores, a final determination will be made as to how much you can borrow and which programs will be ideal for your situation. You will be required to obtain financial docs to support your statements.
It is necessary to determine type and terms of financing in the initial phases of your home search. This process is referred to as a pre-qualification process. A pre-qualification letter will be required with an offer to purchase as well as clearly defined terms such as down payment; amount and type of financing must be presented accurately in your offer in addition to a copy of your pre-qualification letter. This process can take up to several days to complete. When multiple buyers are bidding on the same CT home, a mortgage pre-approval can be the deciding factor in whose offer is accepted.
You’ve found your CT Home - The Mortgage Application Process
- Once a suitable property is located and a mutual agreement of price, terms and closing date is reached a purchase contract will be drawn either by your CT realtor utilizing a standard Connecticut Association of Realtors contact or one will be drawn up by either parties attorney.
- A copy of this contract will be submitted to your CT mortgage broker to initiate your mortgage application.
- As part of the sales contract you will agree to obtain financing within a specified time period, this period may be extended with the seller’s permission in the event that the bank may need additional time to pull the financing together.
- You will meet with your CT loan originator to complete your application, discuss the various fees involved and receive your Truth-In-Lending statement and Good Faith Estimate.
- You will be required to supply a list of documentation needed for processing your loan (click here to obtain a standard list of documentation needed for processing). Your CT loan originator will notify you of any additional docs needed to process and close your loan.
Opening Your File
- An appraisal will be ordered by the bank to make sure that your homes sales price meets current market values based on comparable properties recently sold.
- All of the documentation you’ve supplied is reviewed at this point and you will be notified of additional info required.
- Requests for verification of employment, bank docs etc… are requested at this time.
Processing Your Loan
- All documentation is reviewed for completeness and accuracy. Credit reports are reviewed; the borrower’s debts and payment histories are verified. If there are any unacceptable late payments or collections for judgments a written explanation is required by you.
- The appraisal is reviewed for potential property issues
- Your loan file is packaged and submitted to underwriting
Mortgage Commitment - The Underwriting Process
- The underwriter is responsible to determine if the loan package meets all of the lender’s criteria. If more information is needed, the loan is put on hold until you supply the necessary information
- If the borrower has less than 20% to put towards a down payment, the loan is submitted to a private mortgage guaranty insurer, who provides extra insurance to the lender in case of default. As above, if more information is needed the loan is put on hold until the necessary documentation is provided
- A response is usually provided within 24 to 48 hours.
Pre-Closing
- The title insurance is ordered
- You will be required to obtain homeowners insurance (6-12 months paid in advance)
- Any additional approval contingencies are met
- A closing time is scheduled
Closing Your Property
- Adjustments will be made for misc. items (taxes, heating oil etc.) Your attorney and/or lender will notify you of the amount that you will be required to bring to closing via a certified or bank check once they receive your funds package from the bank.
- A final walk through is usually scheduled within 24 hours of closing. The purpose of this is to make sure the property will be conveyed to you as stated in the sales contract
- At closing you will have to sign and/or initial a package of closing documents that will be explained to you by your attorney. You will receive keys to your new home.