Once you have sent all your loan documentation to your loan officer, it is submitted to processing to begin working on your loan. At this time you will deal more with our processing team to ensure your closing is on time and you are getting the correct documents requested to the underwriter.
By learning what processors are doing with your loan file, will help you understand the loan flow and give you an approximate time frame for your closing. Mortgage processing is the term for all the steps our staff takes to complete your mortgage application.
During the processing of your file, some of the processors duties include ordering the following:
- Ensuring the documentation you provided your loan officer is adequate and up to date
- Verification of Employment
- Credit report supplements (if required)
- Verification of Rent/Mortgage (if applicable)
- Tax transcripts
- Contacting your homeowners insurance company to get your quote and paid receipt (please make sure you supplied us with the name and phone # of the company you will be using for your homeowners insurance). If you are purchasing a condo, this may not be applicable so we will contact you if this item is needed.
- Contacting your attorney for title information (please make sure you provided us with the name and phone # of the attorney, if you need a referral, I work with a very reputable firm and can give you their information)
- Other miscellaneous items depending on the type of property
Once the majority of these items are in your loan file, the processor will submit your file to the underwriter. The processor is in constant contact with you to make sure all the conditions are in the file so the underwriter can fully sign off your file for a final approval.
*It is imperative you get any items to your processor ASAP as we are working toward your closing date and that can be held up if the items are not received from you in a timely fashion.
Norcom Mortgage has our own underwriters on staff and they are extremely knowledgeable in the business. The benefit of having our own in house underwriters are we get answers on your files much quicker than if you were dealing with a broker.
Underwriters review your loan file to make sure it meets all agency guidelines. Sometimes their job is simply to check over the figures, make sure all paperwork is in order and up to date and then give an approval. At other times, they may look over all the paperwork to give a sound decision based on their experience and good judgement.
There are Three Cs of mortgage underwriting:
- Credit – payment behavior over time
- Capacity – ability to repay the home loan
- Collateral – value of the underlying asset (the house). Underwriters use the 3 Cs to underwriter your file
Once the underwriter reviews your file they can make a decision on your loan file. When they approve your loan, they will issue a conditional commitment which means there are several items that are still pending on your loan application. Your loan processor will contact you within 24 to 48 hours to go over these conditions and work with you throughout the rest of the loan process. Please make sure you get the processor the conditions ASAP so we are able to send back to the underwriter for final approval.
*IMPORTANT: Upon receiving a final approval, all lending institutions will do a soft pull of your credit to make sure you have not incurred any new debt. Please be diligent in keeping your credit the same as when you applied for the loan. If this is an issue for you, please bring it to your loan officers attention as soon as possible.
Now it is officially time to say “Congratulations”! It is time to celebrate! Your loan has been final approved by underwriting. The next section you will learn about the closing process.
*Please remember not to incur any new debt until your loan is closed and funded.