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Mortgage processing is part of obtaining a mortgage, but do you ever wonder what goes into the mortgage processing? Our society relies on instant gratification, but unfortunately when it comes to mortgage processing, patience is a virtue. For the average homebuyer, the time from putting a bid on the home and actually receiving the mortgage and closing on the mortgage can take anywhere from 4-6 weeks or more processing time. Even if your lender is working hard to push through the paperwork, you may still not close on the house you are trying to buy for up to a month or more.
You may be most interested in learning how to speed up the process and ensure it happens uneventfully. Most importantly, choosing the right mortgage company can make a huge difference in how fast your processing occurs and yo are approved for your mortgage. The wrong company might submit your application for a loan which you don't stand a chance of qualifying for. The next most important step in speeding up the processing of your loan is to fill out the paperwork completely and accurately, and provide ALL supporting documents that are requested. This crucial step will ensure that once your paperwork is moving through the system towardds approval that an error or omission on your part doesn't move your file to the back of the line again while the processor waits for more information or documentation.
So what takes so long and what exactly goes into the mortgage processing on the part of the lending company? Of course the first step all borrowers take is to fill out the loan application. It is recommended if you are in the market to buy a home in the near future, apply for a pre-approval of your mortgage so that the mortgage processing has started before you put a bid down on a home. This can help to save time with mortgage processing and paperwork. Within days of applying for a mortgage, the borrower will receive a Truth in Lending disclosure form that gives the exact information on what types of mortgages the lender can offer and all the details that go along with the offered mortgage.
After receiving this mortgage processing information and the loan notice, it is important to let the lending company know if you accept the loan they offer so they can continue with the processing. Anything that holds up the processing may mean the closing date for your home will be pushed back until all information is verified and received by the lending company.
The next important step is for the lender to order verification of employment and salary verification from your previous and current employers. The verification will help the lender in processing how much down payment you can afford to pay towards the mortgage as well as outstanding debts to determine what monthly payments will be affordable for you. During the mortgage processing, if the lending company requests any further information, it is important to send in information quickly, or to verify information, so the lender can continue processing your loan. If you donít respond to the lending company quickly, this could hold up your processing. The additional information they might request could include anything from reasons for a past due note on a credit report to reasons for a termination of employment.
Once the lender has received verification from employers and financial institutions, the mortgage processing will be handed over to an underwriter who will hopefully approve your loan. Again, at this stage the underwriter could request further information from the borrower, so it is important to stay informed about the mortgage processing and keep in contact with your lender or broker.
If the borrower puts down less than 20% on a home, the mortgagee will likely need to go to a private mortgage insurance (PMI) guaranty agency, or someone willing to put forth the guaranty toward the amount of money you requested for your mortgage. This is usually an easy part of the processing but may take some time if the mortgage guaranty company needs to make a difficult decision regarding your mortgage processing and finances. Once this is approved and the lender has approved your mortgage, the mortgage processing is almost complete.
The next step is processing orders for other required insurance, such as hazard, liability and flood, required by lending companies. This insurance will protect both the lender and the borrower in case of loss. At the time before the closing processing is completed, often referred to as the pre-closing processing, an appraisal or home inspection may be requested. Requests for home warranty, if desired, will occur at this point in the processing of the mortgage.
Once the pre-closing processing conditions are met, the final stage of the processing is the mortgage closing. The entire mortgage processing on average takes between 4-6 weeks, with only a few lucky borrowers closing on their homes in less than that amount of time. The only type of mortgage processing which may close more quickly is the private mortgage which is a direct mortgage between two private parties.
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