In Idaho, and everywhere else, mortgages are a popular subject of discussion these days, and if you're looking for a simple guide for how the whole thing works, we've got you covered. The simple purpose of the mortgage application is to help the lender determine whether or not they want to lend you money. Your lender will use the Uniform Residential Loan Application form to record your financial information, or you may have heard it referred to as the Fannie Mae Form 1003.
Before you even begin to think about completing this form, you'll want to nab a copy of your credit report and go through it with a fine tooth comb for any errors. You don't want any surprises cropping up, at least not ones you didn't catch yourself. Your ability to obtain a mortgage hinges on what's contained in your credit report, so fixing and correcting errors beforehand is a must.
It can take time for your Idaho mortgage application to get processed, so to speed things up or to ensure it gets processed as quickly as possible, be sure and bring along all proper information to your loan application interview, including: Verification of income (2 years worth), verification of your assets, information about the home you want to buy, and documents of all your debts (credit card, car loans, child support or alimony). Keep in mind that different lenders may have different information requirements, so be sure and ask what you need to bring.
It is during the initial interview that you'll fill out the aforementioned Uniform Residential Loan Application form. Keep in mind this form carries an application fee, credit report fee, and also the appraisal fee. Once the Idaho mortgage form is submitted and your mound of documents, the lender will begin the work of verifying, which is the loan approval process. It can take one to eight weeks, depending.
It's during this one to eight week period of time that the lender is assessing the three C's. Collateral, credit reputation and capacity. If there's an issue with any one of the C's, it's likely your mortgage application won't be granted. Let's look deeper.
Foreclosures, bankruptcies, liens, judgements.
Credit delinquencies, repossessions, collections, or charge-off's
Borrower's request for new credit in the last 12 months
Monthly housing expense-to-income ratio
Salaried versus self-employed
Number of borrowers
Loan characteristics: 15 or 30 fixed rate
Borrower's total equity or down payment
Property type and property use
The outcome will either be a denial of the loan, or an approval. If your loan is denied, the lender must explain the reasons why, as you may be able to find answers or alternatives that will satisfy the lender.
If your application is approved, the lender will begin preparing for the closing of the mortgage. This is the final step before you can call your new Idaho house your own. Two closings occur concurrently, the closing of the sale and the closing of the loan. You've likely heard how much paperwork is involved during this stage of the process. It may include:
Final inspection of the property
A deed of trust
The HUD-1 settlement statement
The truth-in-lending statement
The initial escrow statement
The mortgage servicing disclosure statement
You can see how signing all the paperwork can take some time! The home buying process isn't a quick one, but once you get the keys to your new Idaho home, it'll be worth it. Buying a home is the largest investment most people make, and often the most rewarding.
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