Once your mortgage has been approved,
you start moving towards the closing date. There is still
a lot to do, and most of it occurs without you.
You can help speed things up by
helping in a few practical ways:
" Make sure you provide the complete
documentation, including proper property description, along with
your application.
" You should respond promptly to any requests for
more information.
" You should call and check with both your lender
and real estate agent to check on the loan application and closing
status.
" You can help by contacting employers and others
who need to provide documentation to the lender.
You should keep a record of your
conversations with your lender, agent and other parties involved in
the transaction.
While you are waiting for closing
date, there is a lot going on, including:
The underwriting verification
The lender's team of underwriters are
busing verifying the information on your mortgage application and
supporting documents. They will call your employer to verify your
job status and salary. How deep they check you out depends on how
risky your lender perceives you to be.
The appraisal of the property
Your lender will require an
independent appraisal by a professional appraiser before the
closing. The outcome could change the rate and terms of your
mortgage. When you first applied for your mortgage, the lender
assumes that the purchase price is the accurate value of the
property. This is simply the verification of the property value.
The work is completed by a licensed
appraiser who estimates the value of the property based on a
physical inspection and a sample of the comparable prices for the
properties recently sold in the area. The cost of the appraisal will
run between $300 and $500.
The title search and title insurance
Your lender won't lend you money to
buy a home that another lender or person has a claim to or lien
against. A title company will perform a title search to make sure
that there are no clouds over the title.
The company will research the history
of the property at the county courthouse. They will be specifically
looking for mortgages, claims, liens, easement rights, zoning
ordinances, pending legal actions, unpaid property taxes and
restrictive covenants.
The title insurer will issue a policy
that guarantees the accuracy of the title search. Your lender will
require a policy that protects the lender. In some cases, two
policies are issued, one for the lender and one for the property
owner.
The flood certification
Lenders don't like to lend on
properties in flood zones. If they feel the property is at risk,
they will hire a vendor to analyze the property and neighboring
sites to determine if it is in a flood zone. This is called a flood
certification. If the property is in a flood zone, you will be
required to buy flood insurance. Most standard homeowners' policies
do not cover flood water damages.
The property survey
Some lenders require that a home's
property lines be verified by a professional survey. This ensures
that the stated land is really there.
Equal Housing Opportunity (c) Copyright 2008 RateTake.com