Getting To The Final Mortgage Loan Approval

Getting to the final Mortgage Loan Approval reminds us of an airplane ride. Steve is kind of a “fearful” flier, and he gets understandably nervous right as he’s taking off… and then again, as the plane lands.  We know many first time home buyers who feel the same way about the mortgage process.  Making loan application, getting all of the hundreds of documents we ask you to sign and gather back to us can be nerve-wracking.  Then, right before closing, you are waiting for the FINAL Mortgage Loan Approval. In fact, our clients that apply for a USDA Home Loan and have a NCHFA Mortgage Tax Credit have their loan underwritten 4 times!

There are some details that you can be prepared for, that will help us get your mortgage loan approved through the system faster, and easier. 

• Homeowner Insurance Policy– If you have not already shopped around for Homeowner Insurance, you need to do that pretty early in the process.  We will need an Insurance Binder sent to the Closing Attorney, and this is generally done after the appraisal comes back.  The Insurance Company will require you to pay the first years premium at closing, then we will collect 1/12 of the Premium with your payments, and pay the next years Premium out of your Escrow Account.

• Gift Funds – Often times a parent, or family member won’t transfer Gift Funds to buy a house until the Final Mortgage Approval.   So once the mortgage loan is approved, the Gift Letter, funds, and proper documentation has to be provided to the Closing Department and signed off by the Underwriter. The documentation that is generally needed is:

• Completed, signed Gift Letter 
• Copy of the Gift Check
• Bank Statement from the Buyer showing the money being deposited
• And a copy of the Donner’s Bank Statement showing the funds being withdrawn.

• Repairs – If there were repairs, they have to ALL be completed, and the Appraiser sent back to the property to verify that they were done. Even though repairs should really be made by the Seller, many times the Seller refuses to make them, and if the Borrower wants to Close, they end up making them.  But if the Borrower is going to make the repairs they don’t want to do them until the loan is approved, so this means that they have to get this done as quickly as possible, so that the Appraiser can verify that it has been done.

• The Attorney – North Carolina is an Attorney State, which means that the Attorney will prepare all of the documents for the Closing as well as do the Closing.  The Attorney will immediately begin to work on:

• The Title Search – This needed to be done in order to make sure that there are no Liens against the property, and the boundary lines of the property are verified.
• Title Policy – A Basic Title Policy is required by all Banks/Lenders in North Carolina.  The Basic Title Policy will among other things protect the Buyer against liens on the property.  Most of the Attorneys will also suggest that the Buyer pay for an Owners Extended Title Policy which will further protect them against boundary line disputes.
• Closing Documents – The Attorney will also prepare all of the other documents that are needed for the Closing such as the:
  • Mortgage and Deed
  • HUD-1 Closing Statement

Once the Attorney and Buyer have finished Meeting Conditions On The Commitment Letter, the Closing Department will give the Attorney a “Clear To Close”. These are the words that everyone has been waiting to hear during this whole process, and now the Closing can take place on the date that has been agreed by all parties. Remember that the Underwriter will also verify employment again right before the loan Closes, and we pull another credit check about 2 days before closing too! Getting to the “Final Mortgage Loan Approval” means you have to clear this last-minute job and credit check.

First Time Home Buyers know that they can reach us – pretty much anytime, and that we are going to answer their questions, and not think they are silly. We want to help you avoid the mistakes we see so many home buyers in NC make, and we want to make certain that you are getting the benefits you deserve… because in NC, there just aren’t that many places that offer ALL of the NCHFA Programs.

Are you a First Time Home Buyer in NC?  We’d love to talk to you about how all of this mortgage stuff works!  We believe in educating our clients, so that they have an easier time getting to the Final Mortgage Loan Approval “safely!”  Please call Steve and Eleanor Thorne, 919-649-5058.  We are available to talk to you after work and on weekends – so give us a call, or leave a question below and we’ll do our best to answer it!  You can also find us on Facebook and Google +