Your Questions About Mortgage Loan Process

Thomas asks…

Assuming FHA mortgage loans?

My cousin would like to assume my the loan on my house, he doesn’t have bad credit he just doesn’t have a lot built up. he is a first time home buyer he doesn’t make a whole lot of money but we feel that he makes enough to make payments on the house. His father is willing to co-sign for him. With a co-signer would he be eligible to assume my fha loan? or is a co-signer just if you have bad credit?

also, I’m supposed to close on my new home on sept 23, if we get the ball rolling will this be too short of time to get the old mortgage loan assumed?


John answers:

No, that is plenty of time.

The first step is to call the lender and find out what process they require your cousin to go through.

Keep in mind, that any equity you have in the home will have to be paid to you by your cousin separately…that is something that you probably haven’t considered.

FHA won’t roll it into the existing loan.

Nancy asks…

Mortgage loan Need!! Suggestion pls?

How long does the mortgage loan process take?

John answers:

You mean to apply or to get the actual loan. Applying takes a few hours but then you have to send them tons of stuff and they’ll come back with more requests. Getting the actual loan can be done in 5 days if you have to do it, otherwise it take take up to 60 days or more (if the bank drags their feet, accidentally or intentionally). Generally expect 20-30 days but this is anything but certain.

Honestly, one trick you can try that might help (if the bank is giving you trouble) is to put an artificially near closing date but have an agreement buried in the contract that the date can be extended until the real date (so put the closing date on the contract as 2 weeks away but in a general addendum section put the actual closing date 30 days away) – the buyers and sellers and agents all have to be ok with this for it to work, but they always are. Then tell the bank it has to close in 15 days for whatever reason but insist it has to happen. This will get your closing put to the top of the pile, it still may not close in 15 days but I’ll bet it closes sooner than it otherwise would have. Trick #2 is make sure you get someone at the bank who has been doing this at least 6 months to a year. If the person you get has not been there that long, request someone else.

Mark asks…

which one is the good mortgage company?

I am looking for a mortgage loan

John answers:

Your main concern is your credit score. Most lenders are about the same and offer the same mortgage loan products. The mortgage loan you will get will be based on your credit score and your history of paying your debts.

Buying a house is a step by step process, this is the first step you should take in order to purchase a house. The rest of the steps will fall in place, no matter the type of property you are purchasing.

In order to find out the type of loan programs you are qualified for you will have to fill out a loan application, with a mortgage broker, which you can find one in your local telephone book.

Make sure this mortgage broker or mortgage banker is able to do government loans such as FHA and VA loans if you qualify for one.

He will fill out this application, which takes awhile so grab your favorite beverage and sit down. Once you have completed the application, he will run your credit report which will have your credit scores. These credit scores will determine your interest rate.

The amount of your monthly debt payments you are required to pay as per your credit report and the amount of mortgage you can take on based on your income will determine the amount of house you will be able to purchase.

When you speak with the mortgage broker you will need the following documents to complete the loan application, there will be others, but this will get you started.

#1 One month of pay stubs for each person that will be on the mortgage.

#2 Six months bank statements from each bank in which you bank as well as statements from any 401K from you place of employment.

#3 Two years of federal income tax along with the W-2 that match.

Once he has all that he need to do he can then issue you a pre-approval letter so you can purchase a home. In this pre-approval letter will be the amount of house you are qualified to purchased.

Once he gives you this pre-approval you may now find a real estate agent to find yourself a home or he might have a referral.

Now make sure before you get your pre-approval you and your mortgage broker go over all your options as to the mortgage programs you qualify for, the interest rate, monthly payments.

If you are getting a FHA, fixed rate, two loans to eliminate PMI like an 80/20 or one loan, if you are qualified for and approved for a 100% loan.

You should select the loan that best suit your financial condition at the time. That could be an adjustable rate loan. It could be a fixed rate loan for 5 or 10 years and then adjust. Some adjustable rate mortgages only adjust once.

Make sure your mortgage broker explain all your options so you may make an intelligent decision.

What might be good for one person might not be good for you, in other words just because your friends and all your real estate buddies are telling you about the great fixed rate they got, your financial situation might call for something else.

So select the best option for you and your financial situation.

You should also get a Good Faith Estimate (GFE) which will indicate the cost you will have to pay for getting this loan. It will also indicate the amount of your down payment.

Once you have found a home the real estate agent will then prepare a contract for you and the seller to sign.

Your mortgage broker will now order an appraisal to show proof of the property value.

The mortgage broker might ask for additional information or documentation, don’t get all up tight this is normal, just supply the information or find the documents needed.

After the appraisal has been completed you will be called by your mortgage broker to sign your loan docs so you can take possession of your new home.

Before signing any loan docs make sure they say exactly what you and your mortgage broker went over when you decided on what mortgage program was best for you.

I hope this has been of some benefit to you, good luck


Chris asks…

mortgage loan quarry.?

I have Applied for mortgage loan at HDFC ltd. At last process they put quarry that they can not give the loan because property owner is my father and loan will be paid by me . Is it right ? If yes please specify with which act ? and if no please provide specific reason. waiting for reply.

John answers:

They can pretty much turn your loan down for any reason they want (excluding a variety of types of dicrimination), its not like there has to be some law about buying from your dad.

I nonetheless think you should be able to get a loan on this place is its in good shape and worth something regardless that its your dad. I’d at least call a few more banks and ask them about getting a loan. They have different rules on this, but they are lending on the property so the fact that’s its your dad should not be a deal breaker for everyone.

Charles asks…

What is Mortgage Loan Origination Activities?

I am currently trying to become licensed under NMLS, and I have failed the national test twice. I make passing scores on every category except Mortgage Loan Origination Activities, and since it is tied for the second largest set of questions, it brings my score below the passing 75%. I have talked to the broker I am employed under and he didn’t know what it was referring to, as well as three other individuals that passed the test around the same time I took it and they also did poorly in that category. they don’t remember reading anything about it in the coarse book, and after reading through the whole thing multiple times, I still cannot find out what it is referring to. please help! if I fail it again, I have to wait 6 months to try again.

John answers:

Hey Caleb,

Here is a list of Mortgage Loan Origination Activities that you should research (I give a brief description of each):

o LEAD MANAGEMENT – This function pertains to what a salesman (such as a broker or loan officer) would do in terms of managing one’s sales contacts (or “book of business”). It also pertains to the activity of running several possible loan scenarios for the customer (with variables such as product type, loan term, down payment, etc.). These are scenarios that the sales person provides without taking an application (which are subject to federal compliance reporting).

O LOAN ORIGINATION – The term “Origination” can be used in several ways. The most narrow interpretation is taking the mortgage loan application (the 1003). In other words, collecting the information from the borrower regarding his background, assets, debts, income, property value, etc. “Origination” in the broadest sense is the entire production of the loan (from taking the application to closing the loan).

O PRODUCT & PRICING – The sales person helps the borrower decide which loan product is best for him (e.g., fixed rate mortgages, adjustable rate mortgages, etc. For varying terms such as 10-year, 15-year, 30-year, etc.). The broker or loan officer also references a “rate sheet” which provides the rates under particular criteria (such as loan term, loan-to-value ratio (LTV), etc.). After the borrower decides to go with a particular loan product at a particular price that is available to him, the loan is “locked” (i.e., the rate is locked in just in case interest rates go up). If the interest rates go down, the mortgage company usually lets the interest rate decrease even if it’s locked.

O LOAN PROCESSING – Collecting the necessary documents and verifications to validate the information on the loan application. It usually involves collecting documents from the borrower but it also involves collecting information from other sources (banks accounts, employers, landlords, etc.). The main role of a Processor is to prepare the loan for underwriting (the decision) and/or following up on information that the Underwriter needs.

O UNDERWRITING – The Underwriter examines the proposed loan and approves or declines the loan. He looks at things such as the credit score of the borrower, the value of the property (as established by an objective appraisal), the amount of the loan (and downpayment), etc. If the underwriter wants more information, he usually calls them “conditions” which the processor must gather information against in order to “clear” those conditions so the underwriter can approve the loan.

O CLOSING – After the loan is approved, the Closer ensures that all the documents are prepared to be signed by the borrower. The “closing” refers to a meeting between the borrower and a “closing agent” (a third-party such as a title company) during which the closing agent reviews the document package with the borrower and the borrower signs the documents.

There are other associated activities that occur after the loan is closed (such as “Post-Closing” and “Shipping”). However, I’m assuming that a broker wouldn’t care too much (if at all) about those things.

Hope that helps!


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