What to Expect in the Mortgage Process

Whether you are a first time homebuyer or this is your tenth loan over a lifetime, you are likely to encounter some things that are new to you during your next transaction. In an effort to improve the stability of the housing market and consumer credit availability the United States Government has implemented new regulations that have dramatically changed some aspects of the process.

You might hear a lot of grumbling from mortgage industry professionals about some of these new rules, but at American Financial Resources we have embraced them. They were put in place to protect our customers, and while we always have their best interest at heart, we appreciate the work of those who regulate the mortgage world.

Mortgage Basics

Once you know what you are looking for in a home loan in terms of loan amount, what you expect to put down, value of the property, loan term, amortization type (fixed or adjustable rate), and loan program you are ready to get a quote for a mortgage. (If you aren't sure about all of those previously listed items don't worry - just give us a call at 800-316-9508 and we can help you figure out what makes the most sense for you.) From there the mortgage process will likely go something like this:

• Get an initial quote for a mortgage program. If you have a property identified and are ready for your AFR loan consultant to pull your credit report and gather some additional information that quote can be in the form of a Good Faith Estimate (GFE). New regulations put in place in 2010 prohibit us from providing a full GFE until we have certain information, but if you are not ready for that we can always give you a good idea of what we expect the rate, fees, and terms of the loan will be. You may want quotes for a few different loans if you want to compare mortgage programs. For example you may want to compare a 30 year fixed loan with a 15 year fixed mortgage.
• Complete a full application. It may seem like a lot of paperwork, but in a financial transaction as large as this one there are a lot of details to cover. There are also many different government agencies who have each designed separate disclosures for your protection, to make sure you clearly understand the terms you are agreeing to. If at any point you don't understand something in the documents or disclosures call your AFR loan consultant at 800-316-9508. They are there to walk you through the process every step of the way. You will also be asked to submit additional items to document your income, assets, etc. as required by the guidelines of the loan you are applying for.
• Lock In Your Interest Rate. At some point between application and closing you will lock in your interest rate. This means that you are choosing a rate and the lender is committing to deliver that rate should your loan be approved.
• Your Appraisal and Title Work will be ordered. One of our excellent processors at American Financial Resources, working closely with your loan consultant, will order an appraisal of your property. A licensed appraiser will inspect the home and by comparing it to other homes nearby that have sold recently, determine what they believe its current market value to be. Title work will also be ordered, which searches for any liens on the property - something you certainly want to discover before closing. New Truth In Lending regulations were put into place in 2009 requiring that you sign the Truth In Lending disclosure (part of your complete application) outlining the costs of obtaining your mortgage before any charges are incurred on the loan (other than the reasonable cost of pulling a credit report.)

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If you are ready to move forward or would prefer to have this explained over the phone call 800-316-9508, request a quote, or get started online.