For many
homebuyers, the period of time between the submission of the
loan application and receipt of the lender’s commitment
letter is one of uncertainty and concern. However, if you
understand the process, waiting for approval will be far
less worrisome.
After your loan application has been completed, your lender
will begin the work of verifying all the information you’ve
provided. This process can take anywhere from one to six
weeks, depending on the type of mortgage you choose, whether
you are buying a home outside your local community, and
other factors. Your loan officer should be able to give you
an idea of the processing time for your application.
Within three business days after completing the application,
the lender must give you an estimate of your closing costs.
It will show costs associated with the loan settlement, such
as origination fees, mortgage insurance, title insurance,
escrow reserves and hazard insurance.
You’ll also get a statement that shows, among other things,
your estimated monthly payment. The total cost of all
finance charges on your loan is also shown, stated as an
Annual Percentage Rate (APR). The APR represents the dollar
amount of finance charges you pay either up front or over
the life of the loan, converted to an annual interest rate.
During this "waiting" period, it is important to keep the
lines of communication open. You should be accessible if the
lender needs additional information or documents during
processing. Quick response to lender requests helps keep the
process on schedule.
After the lender approves the loan, you will usually receive
a commitment letter which sets out the terms of the loan and
the length of time for which those terms are offered. You
usually must accept the commitment by returning a signed
copy to the lender within five to 10 days. The commitment
may contain conditions that you will still have to satisfy,
so you should read it carefully.
If the lender decides not to approve your loan application,
the lender has 30 days from the acceptance of your completed
application to notify you. This notification must also
include the reasons for rejection.
Once the commitment letter or approval has been received,
you are assured the financing you need to complete the
purchase of your home and you need to turn your attention to
completing the details required for settlement.
|
|
Downloads
|
