A New Arizona Mortgage: Step-by-Step
The mortgage process is easier than most people tend to think. The following steps will clarify the process.
Step 1 How do I get Pre-qualified and what’s the point?
Pre-qualifying is not really qualifying at all. Pre-qualifying is a bank gathering financial information about you, a bank determining weather you might be able to qualify for a particular loan and amount. The bank will want information like gross income, debt and your goals related to home ownership. They will also check your credit to determine what type of a risk you present. If you appear to have what it takes, then the bank will issue “Conditional Loan Approval.” The conditions will be met later. The point is to get you on the track to fully qualifying for a loan. Your agent will deliver the “Conditional Loan Approval”, along with your purchase offer on a home.
Step 2 What is a loan application?
The official loan application is a document that officially compiles all of your financial information into a logical set. This application is then submitted along with your contact to purchase a home and your documented income to the underwriting department of the bank at which you pre-qualified. The underwriting department makes the final decision about weather you’ll get your loan or not.
Step 3 What are my loan docs (documents)?
Loan docs are created after the underwriting department has approved you for the loan. The docs include everything loan-related to your home. They also include tax and deed information. Once prepared, the docs are then sent to the title company.
Step 4 What role does the title company play?
The title company will compile all documents, including the loan docs, applicable to the purchase of your home. They will research the home and make sure that there aren’t any liens against the property. Finally, they’ll call you in to sign all the documents that will commit you to the purchase.
Step 5 What is closing and recording?
This is the best part. Usually a day or two after signing the documents at title they will be sent back to the bank for approval. Once approved, the bank will fund the loan. Once funded, all documents are released to the county recorder to be entered into a database of purchase records, hence the title, recording. The transaction is now closed. All that’s left to be done is to get physical possession of the home, usually done through the delivering of keys by your realtor.
Well, this is the way it’s meant to go in the state of Arizona anyway. Some minor variations are possible.