After the Mortgage Application is Done

What happens now after the mortgage application has been done? The mortgage professional will work with their processing department to verify the information you gave her.

This can take some time. Depending on how quickly the other parties respond it could take a week or even longer.

Some of the forms you’ll have signed allow them to check with your employer, to verify how long you have worked there and the prospect of future employment.

The lender will need to be sure you can pay back the loan so a good employment history is an important part of your file.

Other things need to be considered also. The type of mortgage you’re applying for, the location of the home etc. So don’t be in a hurry as they do their job.

Within 3 days after the mortgage application has been signed, you will get a Good Faith Estimate (GFE) and Truth in Lending (TIL) form. The GFE will be a complete breakdown of all your closing costs and escrow charges.

Over the course of time you may get a few more of these. If the house you make an offer to purchase does not go through, then each time you write a new offer the mortgage professional should provide you a new GFE and TIL. It’s the law so be sure to ask for it because some folks get lazy at this point.

The TIL is a Federal form that lenders must give you that is a statement of your total costs including your finance charges. This form will give you an Annual Percentage Rate (APR).

Do not get confused with this APR. It’s not your interest rate that you’ll end up paying. To comply with Federal Guidelines you get this form to inform you of the overall costs of the loan for the entire amortization period.

Something to keep in mind after the mortgage application and once your loan has been approved, don’t go out and buy any new items using your credit. Many lenders run a credit check again just before closing to be sure your credit is still intact before closing on the loan with you.

I’ve seen people go and buy a new car just before closing. Even though I told them not to do so, it destroyed their chance of getting the home they wanted.

Why? Now their debt ratio was off and they could not afford the house according to the lending guidelines.

Another case I’ve seen, the person was all approved for their loan. They had an accepted offer to purchase his dream home. Then unknown to him, a previous landlord filed a judgment on him for a years worth of back rent.

Over $5,000 was now against him on his credit report. And all of this, just before getting to the closing table.

So I’m sharing these stories with you to help in your education. If you get denied later for a loan you were once approved for, the reason may be you.

So then, after the mortgage application many things are going on behind the scenes. All of them are for the sole purpose of helping you get closed on your new home loan.

For additional information about things to do and watch for after the mortgage application process has begun, read the other articles in our mortgage library.

Also be sure and request our FREE 14 pg Guide

Return to our Home Page First Time Home Buyer