Home Purchase Timeline

Feb 10, 2005 4:26 PM

Before You Start the Loan Process...

• Estimate maximum or minimum cash you can provide for the down payment and closing costs.
• Do some calculations such as how much you will be able to birrow and what price home you can afford. Vist the website www.freddiemac.com/calculators/ for help.
• Shop for real estate broker (if desired).
• Begin looking at homes.
• Shop for best interest rate and prices with different lenders and/or mortgage brokers.
• Shop for attorney (not required but highly recommended) to represent you as a buyer.
• Shop again for the best interest rate and pricing if these have changed since you began the process. Recalculate loan amount you can afford to borrow.

During the Loan Process...

• Decide on lender and ask for:
  • List of estimated and itemized closing costs.
  • Information on rate lock.
  • What documentation you’ll need to provide.
  • Information on turnaround time for all phases of the loan process.
  • Amounts of checks you’ll need to start loan process.
• Request loan application from the lender.
• Complete loan application.
• Compile all documents/information required by the lender - income, asset and credit verification.
• Submit loan application, required documents and checks for processing (credit report and other fees required by the lender to be paid up front).
• Receive Good Faith Estimate (GFE) and Truth-in-Lending (TIL) from lender or mortgage broker, if you’re using one. The GFE lists all estimated closing costs associated with your loan. The TIL displays full disclosure of the terms of the loan.
• Review GFE and TIL to make certain that the information on the documents is correct. Some lenders require you to sign and return the GFE; others do not. So make sure to ask the lender about anything on the documents that you either do not understand or disagree with - before you sign any documents!
• Lender will contact you via telephone or mail to inform you of their decision on your loan. If your lender asks for additional documentation or information before making its decision, don’t panic. This is common.
• If your loan is approved, you will receive a loan commitment letter that describes all the terms of the approval. If a mortgage broker is involved, he/she will receive the loan commitment from the lender and will contact you. Review the loan commitment and provide your attorney with a copy. Once again, be sure to review and understand the entire document before signing and returning it to the lender.
• The effective period for the loan commitment is stated on the commitment letter. While the commitment is active, you should consider whether to lock in the interest rate and, if so, for how long. A closing date or estimated closing date can determine when and for how long to lock in your interest rate.
• Consult with your attorney and/or mortgage broker to decide on:
  • Estimated closing date.
  • Title company (if applicable).
  • Hazard insurance company/homeowner’s insurance (if applicable).
  • Termite inspection and certification (if applicable).
  • Survey or plot plan (if applicable).
  • Water and sewer certification (if applicable).
  • Flood insurance (if applicable).
  • Certificate of occupancy or building code compliance letter (if applicable).
  • Other applicable documentation set forth in the commitment letter.