Friday, December 8, 2017

Understanding the Mortgage Loan Approval Process

Understanding the different steps in the mortgage loan approval process, and the terms surrounding them, will help you avoid unnecessary stress when buying a home at the Lake of the Ozarks. When your Lake of the Ozarks mortgage lender evaluates your situation for a loan approval, they're assessing your risk. Keep reading to learn how he or she does this.

Pre-Qualification 


A mortgage pre-qualification is an initial evaluation of the credit worthiness of a potential borrower that is used to determine the estimated amount that the person can afford to borrow. During the pre-qualification step, your mortgage lender at the Lake of the Ozarks is looking for an red flags. This step includes a simple review of your debt, income, assets and overall financial situation. At this time, you can discuss your goals and plans, and get a very basic idea of the type of mortgage you might qualify for. This step is often mistaken as being the same thing as a pre-approval, but it's not. 

Pre-Approval 


Getting a pr-approval is the next step, which is much more involved. For a pre-approval, you will need to fill out a mortgage application form. This will include more detailed information about your credit rating, financial background, housing and employment history, current expenses, assets and debts, and other relative information. At this stage in the process, you will need to submit documentation such as W-2's, tax returns, pay stubs, bank statements, proof of retirement accounts, stocks and mutual funds and their balances, and proof of your identity. Your lender will then be able to present you with a specific mortgage amount for which you could be approved and also what interest rate you will qualify for. Once you've been pre-approved, it's time to start house hunting!

Processing


After you've been pre-approved, and you've found a house, you'll fill in the remaining information on the application and then it becomes formal. At this point, the application will go for processing. The processor will examine all the information on your application and look for evidence of anything that may be missing. If there are any issues with the application, the processor will ask you for clarification before proceeding.

Underwriting 


If all the information on your application checks out, it will be sent to the underwriter, who makes the final decision for approval. At this time, the house must be appraised and title insurance must be acquired. Finally, you application reaches the decision maker. The underwriter ensures all the necessary information has been provided and that the loan meets collective guidelines. If the underwriter decides that loaning the money to you is in the best interests of the lender, you will receive a loan commitment letter, allowing you to go ahead and make an offer on the home. 

To get started with a pre-qualification or a pre-approval today, give me a call at 573-746-7211. As your local lender, I'm here to work with you every step of the way. I'll discuss your Lake of the Ozarks home financing options, offer competitive interest rates and back it up with the first class service that you deserve!

For Lake area news, resources and tips on financial services, please 


Michael Lasson
Senior Loan Officer
NMLS #: 493712

4655 B Osage Beach Parkway
Osage Beach, MO 65065

Direct: (573) 746-7211

**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.




2 comments:

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