Mortgage - Loan Application to Final Approval
Very shortly after learning of your accepted agreement, you will want to make sure that you furnish your lender (or provide me lender contact info so that I can) with a copy of your full purchase agreement. This begins the process of final mortgage approval. The lender will likely request additional documents beyond those requested during the pre-approval process and require you to meet with him/her again to finalize loan details.
You will also need to consider whether to ‘lock’ your interest rate at this point or allow your rate to ‘float’ in the hopes that rates improve prior to closing. If you elect to ‘float’ be sure to check back with your lender frequently to see if a change in the financial market indicates a decision time. If you elect to ‘lock’ in your rate, be sure that the lock period extends past the projected closing date.
After completing your actual mortgage application and your accepted contract, your lender will also order an appraisal. The lender may ask that you pay for this up front (prior to closing) through a loan application fee (about $350). In our current market, there are times where homes in volatile areas are not appraising for sales prices. The lender requires this fee up front to insure that the appraisal is paid for whether or not the loan reaches closing.
The lender arranges for appraisal of the property confirming that there is sufficient collateral for the requested mortgage loan. The appraiser usually knows the accepted sales price. Therefore, it is very common for the appraisal figure to be at or very close to the sales price. Many lenders will provide a copy of the appraisal if requested.
Closing Costs
Below is a breakdown of what your closing cost averages would be under three different types of loans. FHA, VA and Conventional are the three most popular types of loan products available today and they each come with fairly similar fees. Most of these fees are typically paid at closing.
|
Buyer |
Estimated Amount | |||
|
Appraisal |
$350 |
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|
Credit Report |
$55 |
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|
Mortgage Title Insurance |
$175 |
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|
Recording Fee |
$75 |
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|
Survey (not required) |
$140 |
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|
Flood Certification |
$16 |
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|
Closing Fee |
$300 |
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|
Processing Fee |
$300 |
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|
Underwriting Fee |
$300 |
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|
Tax Service Fee |
$75 |
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|
Wire/ Courier Fee |
$40 |
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|
MERS/ TIEFF |
$12 |
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|
Total |
$1,837.95 |
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