Mortgage Process

We’ve streamlined the process for our borrowers, and we’ll help do all the heavy lifting when it comes to your loan. To help you prepare, we’ve outlined the process. Keep in mind, every loan and every homebuyer is unique, so think of these steps as a guideline.

Step 1: Pre-qualify

Before you even start shopping for a new home, it’s a smart move to get pre-qualified. This not only gives you an estimate of how much you can spend, but it shows you are a serious buyer, and it can be a competitive advantage when presenting an offer to a seller.

Who’s Involved?

During this time, you’ll work with your ANBTX Mortgage Lender.

How Long Does This Step Take?

This can be done very quickly, usually in just a couple days if not sooner.

What Happens?

You’ll provide some initial information to the lender to receive an estimate of what you can afford. Keep in mind that a pre-qualification is an estimate. Once you find your home, you’ll complete the loan application, including detailing your income and assets as well as submitting your documentation to be verified.

Step 2: Start Shopping

Once you’ve been pre-qualified and have an idea of how much you can spend, you are ready to start actively shopping. It’s usually recommended that buyers work with an experienced real estate agent. Not only will they assist you in your home search— they’re knowledgeable about particular communities and market prices—but they’ll provide advice and support throughout the process, including contract negotiations, financing, home inspections, closing, etc.

Who’s Involved?

During this time, you’ll work with a licensed real estate agent.

How Long Does This Step Take?

This is all dependent upon finding the right house at the right time. In competitive real estate markets, it may take longer due to reduced inventory and increased demand. Be sure to work closely with your real estate agent so they can search for the homes that fit your budget and checklist.

What Happens?

Once you’ve found the right home, you’ll work with your agent to determine the best price for the home and to submit an offer. Your agent will also look at the properties in the neighborhood—they’ll pull “comps” or “comparables” of recently sold homes—to get a feel for the fair market value of the home as well as the market conditions that could influence the price.

During this time, you’ll also discuss the terms of the sale, such as when you’d like to move in, how much time you have to do certain tasks (inspection), etc. After you’re comfortable with the terms, your agent will: prepare the contract, present it to the selling agent, and work to negotiate the offer (if needed).

Step 3: Finalizing Your Application & Home Loan

Once your offer is accepted and you have a signed agreement in hand, it’s time to go back to your lender to finalize your mortgage details so you can close the deal.

Who’s Involved?

During this time, you’ll work with your ANBTX Mortgage Lender and your real estate agent.

How Long Does This Step Take?

You’ll want to complete your application and submit your documentation as soon as your offer is accepted.

What Happens?

When you apply (vs. just pre-qualifying) for a mortgage, you’re giving the lender permission to pull your credit, look over your financial information, order an appraisal on the home, and start a title search. Specifically, you’ll need to:

• Complete Your Application. You’ll work with your ANBTX Mortgage Lender to fill out your application, either online or in person.
• Provide Documentation. You’ll need to provide your income, assets, and debts. Most lenders will require documents to verify this information such as W-2s, paystubs, and bank and investment statements. Generally, your lender will ask for these documents when you submit your application. However, in most cases, additional information will be needed. Your ANBTX lender will contact you to request any added paperwork needed during the underwriting process.
• Review the Loan Estimate. A Loan Estimate (LE) is a standard document you’ll receive when you apply for a mortgage. Your lender is required to send to you a Loan Estimate within three days of applying for a mortgage. Previously known as a “Good Faith Estimate,” the LE is a useful tool for loan shopping. Loan Estimates always follow the same format—three pages long, split into sections which outline the terms, closing costs, and fees associated with your loan—making it simple to compare loan offers side-by-side.

These terms on a LE are valid and binding for a period of 10 days from issuance. That means a lender must follow through with the rate and terms offered on your LE if you move forward with the loan within 10 days—provided there are no major changes to the loan or application.

• Look at your debt-to-income ratio (DTI) examining your debts and comparing them to your income to ensure you have enough cash flow to cover your monthly mortgage payments, taxes, and insurance.
• Verify your down payment and savings looking at your accounts to make sure you have enough savings to supplement your income or to use as a down payment at closing.
• Order an appraisal confirming that the amount of the loan does not exceed the home’s value.

As a buyer, you’ll need to:

• Provide documents as requested by the underwriter. Your ANBTX Mortgage Team will communicate with you during this time to ensure your loan stays on track.
• Lock in your interest rate. Interest rates, including those offered on the mortgage, can be volatile and subject to change. If possible, it is advisable to lock in the interest rate in advance for the loan to prevent any increases due to market fluctuations, which could cause rates to rise before you finalize your property purchase. Even a 0.25% rate hike can significantly increase your monthly payments.
• Review the Closing Disclosure provided by your lender. Federal law requires that lenders provide a Closing Disclosure (CD) at least three business days before your closing date. When you get your CD form, you need to compare it against the Loan Estimate you received when you made your mortgage application. Some charges on your Loan Estimate, such as the loan origination fee and appraisal fee, should never change on your Closing Disclosure. If these fees have changed, contact your lender and ask for a cost correction.

Step 4: Off to Underwriting

Once you’ve submitted your complete application, your loan is off to underwriting, which is where your lender verifies your income, assets, debt, and property details to issue final approval.

Underwriting happens behind the scenes, but that doesn’t mean you won’t be involved. Your lender might ask for additional documents or need you to clarify certain transactions, such as verifying extra income or deposits or providing proof of additional assets or investments.

Who’s Involved?

During this time, you’ll work with a loan processor and underwriter from the ANBTX mortgage team. The processor is responsible for gathering and organizing the necessary documents for the underwriter, who reviews your documentation to determine whether to approve or deny the loan application based on the specific underwriting criteria and guidelines. You’ll also work with your agent and outside vendors to complete certain activities (inspection, insurance, etc.)

How Long Does This Step Take?

Each situation is different, but underwriting can take anywhere from a few days to several weeks. Missing signatures or documents, and issues with the appraisal or title insurance are some of the things that can hold up the process. Be very responsive to requests for information, and if you need more time to gather requested documents, continue to communicate with your lender.

What Happens?

Ultimately, you can think about this part of the process in terms of finalizing your loan and finalizing the home contract.

Finalizing Your Loan

Your underwriter will ensure that you meet the qualifications and requirements outlined by the lender. Specifically, they will:

• Investigate your credit history looking at your overall credit score and searching for things like late payments, bankruptcies, overuse of credit, etc.
• Verify your income and employment asking you to prove your income and employment.

Finalizing Your Home Purchase

You and your real estate agent will also be busy with some to-dos for your new home. Here’s an overview of what you can expect…as a buyer, you will:

• Conduct a home inspection. Contact a licensed home inspector to complete a physical home inspection. An inspection is necessary to identify any potential problems with the property. If the inspector identifies a serious problem with the home during the inspection, you will have an opportunity to back out of the deal or ask the seller to complete repairs. You can also request that the seller pay you to complete the repairs (if your purchase offer includes a home-inspection contingency).
• Arrange for homeowners insurance. Most lenders require buyers to get a homeowners insurance plan for the new home and show proof of this insurance just before or during closing. The cost of your insurance plan will depend, in part, on the features and condition of your home, what you choose to have covered, and how much you’re willing to pay for a homeowners insurance deductible.
• Final walk-through. One of the last steps before you sign your closing papers should be to look over the property one last time. You want to make sure that no damage has occurred since the last home inspection. You should also verify that the seller has completed the required fixes and no new problems came up. Finally, check to see that everything agreed upon and included in the purchase agreement remains.

Step 5: Closing Time

This is it—it’s time to close on your home and get the keys! During this step, the home legally transfers ownership from the seller to you, the buyer.

Who’s Involved?

You’ll work with your real estate agent (the seller is represented by their agent as well) and your ANBTX lender. You’ll also work with a title company and closing agent, who coordinates the various activities and manages the closing (usually at their office).

How Long Does Closing Take?

Usually, you’ll need to set aside at least 2-3 hours to review and sign all the paperwork and finalize the transaction, but this may take more time as each transaction is unique.

What Happens During Closing?

Get ready to sign a lot of documents and to bring along a cashier’s check for the down payment and any out-of-pocket costs the loan doesn’t cover. Your lender will wire the funds financed for the loan to the closing agent to disperse to the seller. (Your lender and closing agent will explain where all the money goes, so don’t be afraid to ask.) Before you arrive, make sure you bring items that are necessary for the closing, such as your photo ID, a cashier’s check, and whatever else your lender or closing agent suggests. Here’s a detailed look at what happens…

• Sign and Notarize Paperwork. Expect a considerable number of documents to sign during closing. While you may be tempted to sign them without reading them thoroughly, it’s extremely important to understand what the documents mean and to know that each is legally binding. It’s also imperative to check for accuracy. For example, look closely at the spelling of your name and confirm the accuracy of the loan terms and closing costs.
• Set Up the Escrow Account for Taxes and Insurance. Your escrow account will be set up during this time. As noted prior, the lender will use the money in this account to pay—on your behalf—costs like property taxes, homeowner’s insurance, flood insurance, and more.
• Fund the Loan. Once the closing documents have been signed by all parties, the title company sends the necessary documents to the lender’s closer for funding authorization. Funding typically occurs within one to two hours after the signing of documents.

Once funding is confirmed, keys will be released, and you may take possession of your new home.

Congrats, you’ve bought your first home and are now a homeowner!

Mortgage Glossary