The term “mortgage” is a form of loan that is often applied in property or real estate dealings, where the borrower applies for a loan from a mortgage lender, usually a bank, in which the mortgage loan will serve as payment to buy a property or real estate. The said property will serve as collateral until such time that the loan applicant will have fully paid the amount according to a scheduled time span.
While there are different procedures and policies set up by mortgage lenders with respect to home loans, basically they still are regulated by state laws to which they have to comply. However, the steps to the process of mortgage lending are somehow similarly adopted by different lenders, so here are the basic steps.
Great effort is exerted by prospective borrowers to look for lenders that offer the best reasonable price quotation for a specified amount of mortgage loan that borrowers are in need of. In the same level of expectation, the lenders would want a borrower to provide complete information of the real estate property and its entailing facts, including the borrower’s credit standing, income, assets and other properties he owns, supported by appropriate documentations including his social security identification and number.
Once the lender gets hold of all information and documents submitted by the borrower, the lender assesses these and prepares the terms of the loan as spelled out into two important disclosures, Good Faith Estimate and Truth in Lending, if the borrower qualifies. Mortgage prices are not fixed and go through resetting on a daily basis and lenders may provide a chance for qualified borrowers to lock the prices before the disclosure documents are finalized. It is for the lender to explain how long the lock period can be safely allowed. So this kind of extended assistance to the borrower will actually depend on the disclosure terms which should be affixed on the same time that the price is reset and locked. Also, according to state regulations, no fees will be collected from the borrower before the receipt of the final disclosure documents. It is important though that the real estate property has been appraised, the title insurance is submitted, and borrower’s submitted documents have been verified for lenders to commit to finalize the disclosure documents. Check out this website at http://www.ehow.com/how_5533752_originate-commercial-loans.html for more details about loans.
Since there is too much risk to simply forego the mortgage price changes, in general, lenders may not offer for a lock in price so that the terms in the disclosures will report actual computations based on the final appraisal of the subject property. When everything has been laid down in accordance to the due process, all documents are ready for signing. It is in this period that the borrower must put effort to review all computed numbers and price quote before completing the mortgage lending transaction, view video here!