The 3 C's of Mortgage Lending
There are some standard factors underwriters consider when approving your loan application. We call these factors the 3 C's of Mortgage Lending.
- Credit - Past credit history is evaluated for timely payment of obligations. Credit scores are also evaluated and play a part in determining your interest rate.
- Capacity - Income and debt structure are evaluated to determine ability to pay the loan as part of a smart monthly budget.
- Collateral - The subject property is used as collateral against the loan. An independent appraisal report is prepared and reviewed to determine marketability and value of the subject property.
Processing Your Loan
The processing of your loan involves the collection of all outstanding documents needed to satisfy the conditions set forth by the underwriter in your commitment letter. These conditions could include: verifying your income and assets, reviewing the Purchase and Sales Agreement and appraisal, obtaining information or documentation to substantiate past credit issues, child support/alimony payments, receipt of gift funds, employment information, etc.
Closing Your Loan
The closing step completes the process of obtaining a mortgage. Because it usually occurs at the same time that you are purchasing a home, it can be a complex and confusing step. The best strategy for a smooth closing is to know what is involved, think ahead, and get help from your home buying team. Your Mortgage Consultant and Real Estate Professional will tell you exactly what to bring with you, and the title officer will explain every document that you sign.
Be sure to bring:
- Current Photo I.D.
- Cashier's Check - if you're the purchaser - a personal check is not acceptable
Be sure to:
- Sign your name exactly as presented on your paperwork
- Plan ahead for moving day. You will not receive your keys at closing - not until the mortgage has closed AND funded or later, depending on your purchase contract. Ask your Realtor to be sure when you will receive possession of your new home.
