Home loan basics in Albuquerque New Mexico

PREQUALIFICATION
"Prequalification" occurs before the loan process actually begins and is usually the first step after the initial contact is made. In a Prequalification, the Lender gathers information about the income and debts of the home buyer and makes a financial determination about how much house the home buyer may be able to afford. Different loan programs may lead to different values, depending on whether you are qualified for them, so be sure to get a Prequalification for each type of program you are suited for.

APPLICATION
The "Application" is actually the beginning of the loan process and usually occurs between days one and five of the loan. The buyer, now referred to as a "Borrower", completes a mortgage application with the Loan Officer and supplies all of the required documentation for processing. Various fees and down payments are discussed at this time and the Borrower will receive a Good Faith Estimate (GFE) and a Truth-in-Lending statement (TIL) within three days, which itemizes the rates and associated cost for obtaining the loan.

OPENING THE FILE
This occurs between days one and three. At this time the Lender obtains a unique loan number, assigns a processor, orders a property appraisal, and orders a title binder.

PROCESSING
Processing occurs between days 1 and 25 of the loan. The "Processor" reviews the credit reports and verifies the Borrower's debts and payment histories mails out requests for verifications, if necessary, for employment (VOE) and bank deposits (VOD) and any other documents needed for processing of the loan. All information supplied by the Borrower is reviewed at this time and a list of items not yet received is compiled. In some cases if there are unacceptable late payments, collections for judgments, etc., a written explanation is required from the Borrower. The Processor also reviews the appraisal and survey and checks for property issues that may require further discernment. The Processor's job is to put together an entire package that may be underwritten by the Lender.

UNDERWRITING
With the invention of automated underwriting, "Lender Underwriting" occurs at loan application. If the loan is approved at this point the Borrower is provided a preliminary approval letter that they can present to their realtor and prospective sellers. If the loan is not immediately approved and needs a second look by a human Underwriter that process can take between 24 hours and several days. The Underwriter is responsible for determining whether the combined package passed submitted to them by the Processor is deemed an acceptable loan. If more information is needed, the loan is put into "suspense" and the Borrower is contacted to supply more documentation.

PRE-CLOSING
"Pre-Closing" occurs between days 20 and 30. During this time the title insurance is ordered, all approval contingencies required of the Buyer, if any, are met and a Closing time is scheduled for the loan.

CLOSING
Closing usually takes place 25 to 30 days after initiation of the loan. Closings occur at different types of business locations places depending upon the regulations and procedures appropriate in that state. In New Mexico, Closing takes place at a Title Company and Buyer and Seller usually close at different times with their respective Real Estate Agent. At the Closing the Lender "funds" the loan with a cashier's check, draft or wire to the selling party in exchange for the title to the property. This is the point where the Borrower finishes the loan process and ACTUALLY BUYS THE HOUSE!



	7 STEPS TO A HOME LOAN PREQUALIFICATION "Prequalification" occurs before the loan process actually begins and is usually the first step after the initial contact is made. In a Prequalification, the Lender gathers information about the income and debts of the home buyer and makes a financial determination about how much house the home buyer may be able to afford. Different loan programs may lead to different values, depending on whether you are qualified for them, so be sure to get a Prequalification for each type of program you are suited for. APPLICATION The "Application" is actually the beginning of the loan process and usually occurs between days one and five of the loan. The buyer, now referred to as a "Borrower", completes a mortgage application with the Loan Officer and supplies all of the required documentation for processing. Various fees and down payments are discussed at this time and the Borrower will receive a Good Faith Estimate (GFE) and a Truth-in-Lending statement (TIL) within three days, which itemizes the rates and associated cost for obtaining the loan. OPENING THE FILE This occurs between days one and three. At this time the Lender obtains a unique loan number, assigns a processor, orders a property appraisal, and orders a title binder. PROCESSING Processing occurs between days 1 and 25 of the loan. The "Processor" reviews the credit reports and verifies the Borrower's debts and payment histories mails out requests for verifications, if necessary, for employment (VOE) and bank deposits (VOD) and any other documents needed for processing of the loan. All information supplied by the Borrower is reviewed at this time and a list of items not yet received is compiled. In some cases if there are unacceptable late payments, collections for judgments, etc., a written explanation is required from the Borrower. The Processor also reviews the appraisal and survey and checks for property issues that may require further discernment. The Processor's job is to put together an entire package that may be underwritten by the Lender. UNDERWRITING With the invention of automated underwriting, "Lender Underwriting" occurs at loan application. If the loan is approved at this point the Borrower is provided a preliminary approval letter that they can present to their realtor and prospective sellers. If the loan is not immediately approved and needs a second look by a human Underwriter that process can take between 24 hours and several days. The Underwriter is responsible for determining whether the combined package passed submitted to them by the Processor is deemed an acceptable loan. If more information is needed, the loan is put into "suspense" and the Borrower is contacted to supply more documentation. PRE-CLOSING "Pre-Closing" occurs between days 20 and 30. During this time the title insurance is ordered, all approval contingencies required of the Buyer, if any, are met and a Closing time is scheduled for the loan. CLOSING Closing usually takes place 25 to 30 days after initiation of the loan. Closings occur at different types of business locations places depending upon the regulations and procedures appropriate in that state. In New Mexico, Closing takes place at a Title Company and Buyer and Seller usually close at different times with their respective Real Estate Agent. At the Closing the Lender "funds" the loan with a cashier's check, draft or wire to the selling party in exchange for the title to the property. This is the point where the Borrower finishes the loan process and ACTUALLY BUYS THE HOUSE!