MORTGAGE 101

Apply in just a few minutes on our secure website portal.Try to fill out as much information as possible; we can always go back and change information if needed. You will then be prompted to upload documents needed to begin your pre-approval. This allows us to verify your income and assets to pre-approve you for a mortgage, which will help you look competitive when you put an offer on your dream house. We will schedule a virtual strategy meeting with your loan officer to create a custom mortgage strategy that fits your financial goals. Upon qualification, you will receive a letter to provide the sellers showing you are a qualified buyer. You will work with your expert realtor to start making offers on your new dream home. If you know beforehand what houses you are going to tour, let us know so we can give you an address-specific preapproval to make an offer with. 

There are a couple key things that can trip up your loan. To make sure your loan process goes as smoothly as possible don’t do the following things:

Don’t take on any new large debt before closing it can cause closing delays. Please do not buy a car when you’re about to purchase a home.

Don’t open up a credit card or any new lines of credit whether that be car loans or credit card debts. Please wait. You can do it the day after closing just not before closing.

Don’t put large expenses on a credit card you already have. That’s going to change your debt to income ratio. If you suddenly have a high credit card balance that you didn’t have before and we will be checking that a couple of days before closing. If something comes up, call your loan officer and they will advise you how to handle it without jeopardizing your loan.

Don’t quit or change jobs. If you’re going to have any changes of employment whether it be leaving your job, your income going down because you’re relocating, etc; all of those things affect your loan. So if you’re thinking about changing jobs don’t do it before you close on a house we’re qualifying you on the income you’re making right now. So we need to know about any plans for changes of that income. If there are circumstances, such as moving jobs for a pay increase, discuss this with your loan officer to know if you can make the move before or after closing.

Don’t move money between accounts. You might have a checking account, a savings account,  a stock account and other monetary accounts. Any movement, in the accounts we used to qualify you, that happens within two months of closing we have to document. So the more you move money around the more complicated it gets to gather all those documents from you and get you into closing. This includes larger deposits. So if you feel like you need to pull from multiple accounts to close we need to make sure we know that up front and as little money movement as possible is better just because it makes it a lot more streamlined through underwriting.

The seller has accepted your offer. Now it’s time for us to start working our magic behind the scenes. We will work with you to lock your mortgage rate. Once your rate is locked it won’t change. Your mortgage rate is set based on the markets that day. You will receive a loan estimate, which is a breakdown of your loan right now. These numbers will update as invoices arrive and the title company supplies tax records. Signing the loan estimate shows your intent to proceed. We will then order your appraisal and our processing team will audit your file to let us know if any new/updated documents are needed to refresh your application before submitting to the underwriters. Do not be alarmed if more information or documents are requested, this is a completely normal part of the process. 

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When you come to closing you’re gonna be bringing two things: fees and escrows.

The fees portion of your closing cost covers the closing attorney (title company), the appraiser and the lender.

What it does not cover is your inspections. If you get a survey or a pest inspection all of those things are paid outside of closing.

The closing attorney is going to charge you for not only their time but for recording your deed at the courthouse. Title insurance will also be a part of your closing costs. Title insurance covers you if for any reason someone comes after your title saying that they’re going to put a lien against your house for a charge that is not yours. For example if the seller of your home put a new roof on the house but never paid the roof for that roofer might try to put a lien on your property for payment. That’s not your debt, and title insurance protects you from that.
Escrow is the piggy bank that holds taxes and insurance to pay them when they’re due. We collect three months of insurance, four months of taxes and also a one year fully paid up homeowner’s insurance policy.

What I find is usually the fees and the escrows are about half and half of your total closing costs. On the internet, you’re going to see a lot of numbers floating around when it comes to closing costs.We typically prepare our clients to estimate between 2 to 3% of your purchase price forclosing costs. This tends to be a pretty good rule of thumb to cover those costs.

View average closing costs by state.

After our fantastic team verifies all documents they will issue the clear to close. Either at this point or prior (a minimum of 3 days prior to closing), you will receive your preliminary closing disclosure or CD. This shows an updated breakdown of your loan right now. There may be some other adjustments made after the attorney completes their final audit; such as tax adjustments the seller pays instead of you. Signing the preliminary closing disclosure just means you acknowledge the document. We will go over this with you in detail and explain any numbers that may change. Prior to closing we will call you to review the final closing disclosure you will sign on the day of closing. We will also answer any questions you may have to help prepare you for closing day! 

You have gone to the closing table, everyone has signed all the documents, funds have been transferred appropriately . . . and you get the keys to your new home! Congratulations!

At Vine Lending Team, our clients are clients for life! After closing, we will be following up to answer those aftermath questions; like when is your first mortgage payment? Fun fact: you get to skip your first month’s mortgage payment! Our team is here for you during the mortgage process and beyond. We consider you family!

We will also ask if you could leave us a Google review, to help others see why working with Vine Lending Team is a great decision for their home buying journey.