Buying A House: Get Mortgage Loan Approval
This is pivotal point in the home buying process, securing mortgage loan approval. Mortgage lenders approve loans based upon solid credit, income, assets and an appraisal that supports the purchase price.
Mortgage loan approval is issued in one of two ways.
Final Loan Approval-this is also referred to as a “clear to close” meaning the mortgage lender has cleared your loan and is ordering order final loan documents for you to sign to close escrow. Usually, the mortgage lender has their own internal audit on your home loan which they have to go through first before issuing the final loan approval. This is why in most cases final loan approval does not happen right away.
Conditional loan approval-this is the more common form of mortgage loan approval used by mortgage lenders today. A conditional mortgage loan approval is just that it is “conditional,” it is “conditional subject to” obtaining certain items, either from you the home buyer, your real estate agent or title company.
When you are in the process of buying a house and you attain a mortgage loan approval, here the different types of loan conditions that your mortgage lender must meet.
There’s two types of conditions on mortgage loan approvals. There’s PTD conditions, which represent prior to doc conditions and then there’s PTF conditionswhich represent prior to funding conditions. Prior to doc conditions make loan approval “conditional”.
For example: your mortgage lender might give you a conditional approval with the following PTD and PTF conditions.
Prior To Doc Conditions
- need most recent pay stub for most recent month for all borrowers
- letter of explanation for credit inquiries for both borrowers
- provide copy of hazard insurance declaration page
- provide copy of earnest money check: please include front and back copy of check and paper trail money is used for contribution
- provide W-2′s for both borrowers
Prior To Funding Conditions
- title company to provide final closing statement till under
- provide wiring instructions
- provide mortgagee clause to funder
- final 442 inspection on property required per underwriter
The mortgage lender is responsible for obtaining both PTD and PTF conditions.
Tips for obtaining a successful mortgage loan approval on your home purchase.
Get all financial documentation required by your mortgage lender back to them within 24 business hours. Make sure to ask questions and discuss any possible concerns you might have regarding the financial items needed. Remember your mortgage lender helps people buy houses on a daily basis and is very familiar with the types of items generally needed on a mortgage loan approvals. Call them if you need clarification about a certain item. It’s better to call them even if you think it’s a stupid question and be thorough, than to send in financial documentation that might be inaccurate or incomplete only to have your mortgage loan process take longer.
*Note-this is usually the time, at mortgage loan approval, when you can safely remove the mortgage loan contingencies contained within your purchase contract.
When your mortgage lender receives these items back, they will resubmit these items to underwriting and ask underwriting to issue a final loan approval. Once you have final loan approval, you can order loan documents and the next step is signing final loan papers!
Keep in mind sometimes things happen. Contractual extensions can often be granted. Not everything is always going to work out perfectly 100% to the T., but if you can plan for the worst, hope for the best and come out somewhere in between, you will be in pretty good shape for buying your house.
You can successfully attain mortgage loan approval and buy a house by staying in constant communication with your mortgage lender and real estate agent. Discover why it’s so important when buying a house, to get mortgage loan approval asap.