Mortgage Process

Let’s find out how much you can borrow!

The first step in obtaining a loan is to determine how much money you can borrow. In case of buying a home, you should determine how much home you can afford even before you begin looking. By answering a few simple questions, we will calculate your buying power, based on standard lender guidelines.

If the March Real Estate Group is assisting you with your mortgage, we’ll need the 4-C’s to get you pre-qualified.

What are the 4-C’s?

01. Cash – How much money do you have to put towards this purchase?

• Do you have enough saved for downpayment, closing costs, and reserves?

02. Credit – What’s your credit score?

• Are there any credit issues like recent late payments, judgements, repos, foreclosures, or evictions?
• Your credit report is reviewed to determine the type and terms of previous loans. Any lapses or delays in payment are considered and must be explained

03. Capacity – Can you afford the mortgage payment?

• Is your income sufficient to cover monthly payments?  Industry guidelines are used to evaluate your income and your debts.
• Do you have stable income (at least 2 years)?
• If self employed, can you show tax returns showing stable income?
• What are the monthly minimums of all payments on your credit report?
• The lower your debt, the better!
• How much do you want to spend on your new mortgage each month?

04. Collateral – Is there sufficient value in the property?

• The property is appraised to determine market value. Location and zoning play a part in the evaluation.
• Your new home must appraise, must be livable (unless renovating), and the sales pice and payment must be acceptable to you.

If you can pass the 4 C’s, you should be ready to apply for the loan.

• Choose a Lender: Research and select a mortgage lender. You can choose from banks, credit unions, mortgage brokers, or online lenders.
• Submit Application: Complete a mortgage application, providing personal, financial, and property information.
• Document Verification: Provide necessary documentation such as pay stubs, tax returns, bank statements, and employment verification.
• Credit Check: The lender reviews your credit history and determines your creditworthiness.
• Pre-Approval: Upon successful review, the lender provides a pre-approval letter indicating the maximum loan amount you’re eligible for.

Getting pre-approved requires verification of your income, credit, assets and liabilities. It requires more work than getting pre-qualified (which is nothing more than a rough estimate of what you may qualify for).

It is recommended that you get pre-approved before you start looking for your new house so you:

1. Look for properties within your range.
2. Be in a better position when negotiating with the seller (seller knows your loan is already approved).
3. Close your loan quicker.

It’s time to go shopping! Work with your March real estate agent to find a your new home that fits in your budget.

• Make an Offer: Once you find a property, your agent helps you draft and submit an offer to the seller.
• Offer Acceptance: If the seller accepts your offer, you move to the next step.

Complete the online loan application and click submit. Make sure to gather all of your loan docs so we have them ready to submit to the lender for final processing and underwriting.

Once your loan application has been received we will start the loan approval process immediately. 

Although lenders conform to standards set by government agencies, loan approval guidelines vary depending on the terms of each loan. In general, approval is based on two factors: your ability and willingness to repay the loan and the value of the property.

Other Documentation

In some cases, additional documentation might be required before making a final determination regarding your loan approval. In order to improve your chances of getting a loan approval:

1. Fill out your loan application completely. You may use our online forms to expedite the process.
2. Respond promptly to any requests for additional documentation especially if your rate is locked or if your loan is to close by a certain date.
3. Do not move money into or from your bank accounts without a paper trail. If you are receiving money from friends, family or other relatives, please prepare a gift letter and contact us.
4. Do not make any major purchases until your loan is closed. Purchases cause your debts to increase and might have an adverse affect on your current application.
5. Do not go out of town around your loan’s closing date. If you plan to be out of town, you may want to sign a Power of Attorney.

• Property Appraisal: The lender orders an appraisal to assess the property’s value and ensure it’s worth the loan amount.
• Title Search: A title company conducts a title search to ensure there are no ownership disputes or liens on the property.

Your loan processor will verify all of the information you have given. If any discrepancies are found, either the processor or your loan officer will troubleshoot to straighten them out.

• Document Review: The lender’s underwriter reviews your application, documentation, credit history, and property details.
• Loan Decision: The underwriter approves, conditions, or denies the loan based on their assessment.
• Conditions: If conditions are attached to the approval, you’ll need to provide additional documentation or explanations.

Other Documentation

In some cases, additional documentation might be required before making a final determination regarding your loan approval. In order to improve your chances of getting a loan approval:

1. Respond promptly to any requests for additional documentation especially if your rate is locked or if your loan is to close by a certain date.
2. Do not move money into or from your bank accounts without a paper trail. If you are receiving money from friends, family or other relatives, please prepare a gift letter and contact us.
3. Do not make any major purchases until your loan is closed. Purchases cause your debts to increase and might have an adverse affect on your current application.
4. Do not go out of town around your loan’s closing date. If you plan to be out of town, you may want to sign a Power of Attorney.

In the meantime, we’ll also…

• Order the Property Appraisal: The lender orders an appraisal to assess the property’s value and ensure it’s worth the loan amount.
• Conduct a Title Search: A title company conducts a title search to ensure there are no ownership disputes or liens on the property.

Once all conditions are met, the loan is approved, and you receive a Clear to Close (CTC) notification.

The lender provides a Closing Disclosure, outlining the final loan terms, closing costs, and other important details. Be sure to read this in detail, ask any questions and address all concerns. We want to make surw we get the loan details right and you know the details of your purchase.

Before closing, do a final walkthrough of the property to ensure it’s in the expected condition.

• Secure Homeowners Insurance: Purchase homeowners insurance and provide proof of coverage to the lender.

• Signing Documents: Attend the closing meeting to sign all necessary loan and property-related documents.
• Payment: Pay the closing costs, down payment, and any other fees.
• Recording: The loan documents and property deed are recorded in public records.

The loan is closed. You’re all moved in and now you begin making regular monthly mortgage payments to your lender.

• Escrow Account: If you have an escrow account, the lender manages property tax and insurance payments on your behalf.