What to expect during the “Condition to Financing” period.
Hi everyone. I hope you enjoyed the last read about what to expect after applying for a mortgage (http://www.ericavincelli.com/what_to_expect_after_applying.html). This next article is about what to expect during the “Condition to Financing” period. Your offer has been accepted and now you need your mortgage approved. These five, sometimes 10, days can bring highs and lows: like the fastest roller coaster from your favorite amusement park. I can’t speak for other brokers – what I am going to explain to you is what my clients can expect.
As I have repeatedly stated in the past, no two mortgages are alike and situations can vary from client to client and/or from mortgage to mortgage. In this instance, and for the sake of this example, let’s assume you have completed an application: I’ve pre-qualified you, provided you with a price range to shop with, and you’ve found and purchased that perfect home. In a perfect world, you would have sent me all your documents prior to finding your dream home so I have everything I need to send to the lender with the application upfront. BUT life gets busy and you did not send me any of the documents I’ve requested. This is common because most people are so eager to go out and start SHOPPING, clients sometimes forget to gather and send me what’s needed. The following is pretty much what you can expect for the next week while I work my magic to get you the best mortgage.
I get the excited phone call from you saying “THE OFFER WAS ACCEPTED!!!! …er, now what???” After a few cheers and congratulations my mind goes right into mortgage mode. I contact your realtor and have them send me the MLS (realtors’ version) and the fully signed purchase and sale agreement. That document has most of the information I need to include in the application i.e. closing dates, price, deposit, waiver dates, etc. I review what best rates and mortgage products you qualify for and can sometimes even find an unpublished rate discount if the closing date is less than 30, 60 or 90 days *OAC. I often have rate specials for mortgages that close quickly (so keep that in mind if you look for a home and want to move in sooner. It can even be part of your negotiations, if applicable). I then submit the application to the lender. In the application, I take you from black and white numbers to a person. Maybe you’ve come out of a bad separation and bruised your credit in the process or maybe you are just entering the work force and have limited credit history and you’ve asked your parents to co-sign. Perhaps you are the ideal client with perfect credit, great stable employment and great source of down payment. Whatever the situation, I bring your story to life.
….And then we wait….
This is not only the hardest part for you but this is the hardest part for me too. I hate waiting just like everyone else but this is the part where the lender goes over every inch of the application and shares it with the insurer and/ their compliance department to determine whether they want to give you money. It is the hardest part but it is also the most important part.
Once they say “APPROVED!” they issue a commitment with conditions that have to be met in order to grant you this mortgage. The commitment is like a contract between you and the lender: they promise to give you $XX.XX at X.XX% interest rate, for this amount of time and you will pay them $XX every month for however long the term you agree too.
This next part is where I differ from other brokers. Some mortgage advisors and real estate agents are satisfied with just the commitment in order to waive financing. I AM NOT!!!! There are any number of reasons why a mortgage will be issued a commitment and still not go through so it’s my job to make sure as many of the conditions are approved before waiving your financing. I make it my mandate to make sure your investment, deposit and decision to buy this house is protected and I want to guard it with my life.
Once I get the commitment, I review the content and address any concerns with the lender (sometimes the rate is incorrect or the term, down payment source or amount, whatever the case). I provide you with a list of all the items I need from you. I go through each document you send me and make sure they cross reference with the information on the commitment i.e. down payment, source of down payment, income, etc. and then package the information together and send it to the lender for review and approval.
…. And then we wait! …Again!!
I know I know, it’s not fun but it’s necessary. The waiting game may bring feelings of anxiety and uncertainty; unfortunately, they are all normal but when you move into that new beautiful dream home, it will all be worth it.
Now that the lender has issued the commitment, has reviewed and approved your documents, the mortgage application is considered “BROKER COMPLETE”! I love those two beautiful words and dream about them and get excited every time I see them in an e-mail confirmation. I contact you with the good news, we exchange a little happy dance over the phone and then the last five days are just a blur.
There may be some highs and lows during this period from waiting to hear back from the lender or not sure your boss will give you your letter of employment in time. No matter what comes up, I will be with you every step of the way and will make sure that your experience with me is as easy and pleasant as possible.
If you are in the market to purchase a new home, refinance an existing mortgage or know someone who has questions about a mortgage, please reach out to me and allow me to assist. Thank you to all who reached out with questions and suggestions for future topics. If you continue to have any questions about this or other topics, please call or email me anytime!
Have a great day!!
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