After Getting Approved
Whew! You’ve made it over the huge hurdle of getting approved for a mortgage. Now what?
Knowing what to expect throughout the rest of the closing process – before going through it – will save you a lot of time and headaches. Here are the steps you will be required to take once you’re approved for your home loan and ready to close on the home of your dreams.
Getting an approval on a mortgage has two parts. If you’ve been approved for a home loan, you’re halfway done. Next up is getting an appraisal on the home you are buying. Every mortgage approval has contingencies – or conditions – to meet before the deal can close. You will work with the loan officer to complete the closing process, while the lender acts as a liaison between you and all other parties to keep the process moving along.
If you are purchasing a home, the appraised value must come in at the purchase price or higher. Otherwise, you’ll have to either renegotiate the price of the home or increase the down payment. For a home refinance, the appraiser schedules the appraisal appointment with you. If you’re purchasing a home, then the appraisal appointment is scheduled with the current owner.
Appraisal copies go to the loan officer and your mortgage file so he or she can clear the contingency and continue along with the process.
Meanwhile, the title company is also working behind the scenes with the loan officer, researching the property records of the county where they home is located so they can identify any mortgages, liens, or claims of ownership that may exist for the property. This research ensures that, when you take over the ownership or title to the property, the title is “clean.” That means there are no other claims to ownership and that any liens or mortgages are cleared, so only your mortgage is using the home as collateral.
The title company also provides the insurance. Once they have researched the title and lien history of the property the company issues an insurance policy. Title insurance indicates that the title is clear at the policy issue date and protects you in case any title issues pop up in the future.
The title work and policy copy goes to the loan officer for your mortgage file. This is returned to the underwriter to clear this contingency, and continue along with the closing process.
Preparing for the Closing
Once you receive mortgage approval, several items still need to fall into place before the closing is scheduled. When this work is complete, the closing date is scheduled. A day or two before, and sometimes the day of the closing, you will be able to pick up the amount of money that you must bring in the form of a certified check to the closing table. Then, it’s time to attend the closing and take ownership of the home.