When the application is taken for a mortgage loan we must assess
the profile of the borrower and determine the best type of loan and the
the best way to present the loan for funding.

Documentation:

• Full (Doc) Documentation - When the client had Standard employment and can produce Pay stubs and 2 years W2s.           Full documentation Is quickly becoming the rule of thumb with many Lenders as it present the least margin of risk.
• Stated Income verified assets and Stated Income Stated assets and no doc loans are vanishing and are reserved mostly for self-employed persons with above average FICO scores.    

Federal Housing Administration – Housing Urban Development;

Created in 1934 the FHA/HUD programs were begum to assist would be home buyers to obtain the mortgage financing needed to purchase their home. This was accomplished by insuring the mortgage to the  bank to protect from default. Today the importance of the FHA program has been a welcoming agent to fill the void left by the absence of Subprime mortgage lenders. 

When income documents are received with a fully completed application the loan officer may secure a pre qualification offering from the lender. This will confirm the loan program, present mortgage rate and terms of the loan. Most often the pre-qual may determine the documents that would be required.

Appraisal

An appraisal is ordered from a licensed and insured
Appraiser, you the borrower may recommend one, if that  person meets the criteria they may be considered. Some banks have pre-approved appraisers that must be used.
The purpose of the appraisal is to determine the value of the property. The appraiser will examine the propert taking pictures of the bathroom, kitchen and other living spaces as well as exterior photos of the structure. The property is then compared to similar properties what is typically called “Comps” or comparables. 
The lot size, square footage of living space,age, construction type are considered in determining value.  Depending on the community, urban versus rural the comps should be within a certain distance from the subject property and the sales of the comps must have been made within a reasonable time, (usually within 3- 6 months). The appraisal is not transferrable without the express permission of the agency ordering the appraisal. If re-assigned there is a cost as determined by the appraiser.

Title report

The title report insures that the person has clear
title of the property and there are no outside parties who can make claim to the property. A survey map will identify the boundaries of the land and if there are easements- e.g.; alley way for common use. Violations, land use restrictions, permits, public  record data and liens are inclusive in the report.

Submission

Once we have collected the above the loan can  
Be submitted to the bank for underwriting.  The under-writer looks through the folder scrutinously to uncover incomplete and missing documents.  Moreover, they protect the bank from funding decisions based upon fraudulent documentation.

Closing

The date has been set to close the loan, present will be the closing attorney, the title officer, the buyer, seller and their legal representatives.  For refinancing an attorney may not be necessary but this is at the discretion of the borrower (it is wise to have legal counsel to represent you).  The funding of the loan at the time of closing happens when a sale is being made and with commercial refinancing transactions. Refinancing of residential properties is protected by consumer legislation mandating a 3 day right to receission. Following the close you have the right to cancel the loan making the loan null and void with no cost to you the consumer, unless other agreements were made prior for broker fees or other predetermined consumer agreed costs.