As a private money lender, we are offering a complete asset based financing, no credit checks or income report is needed from our borrower, but we seriously qualify the property. Whether you are buying your first home or gearing up for a second purchase, you’ll be responsible for paying a variety of closing costs and other fees related to obtaining a real estate loan. But it’s important not to overlook other costs associated with the processing of the loan.
Understanding Mortgage Fees and Closing Costs
Upfront costs can feel a little bit like sticker shock—but there are options to help you alleviate the sting. The key is understanding the purpose of these fees, where they come from, what role you play in the process and how much you are responsible for. Once you do, you’ll have a much better understanding of where your money is going and when you need to have it ready.
Loan Application, Processing and Underwriting
It takes a team of mortgage professionals to process your loan application. And these upfront fees help cover the wide variety of administrative and underwriting costs it takes to approve your loan. You can generally expect to pay about 1% of your total loan costs. For example, if your loan is $150,000, you’ll need to shell out $1,500 to cover these fees.
Explaining the Loan Process
You’ve made it through the loan application and now your application will start moving through the loan process on the way to the closing table. If you have ever wondered what goes on behind the scenes during this time, here’s your guide—including important ways you can help. The time between the loan application and the closing is known as loan processing. During this step, your lender’s loan processing team will double-check your file to make sure it is complete and accurate. This means collecting and verifying all the information you’ve supplied, arranging for a home inspection, and others. Ultimately, all of this data will be used to determine your loan approval status.
What is a Loan Processor?
You may love your real estate agent and rely on your inspector, but the relatively unknown loan processor plays an equally important role in getting you the home you want. A loan processor or Home Loan Specialist here at LNT INVESTMENTS LLC is a financial expert who collects and prepares all of the materials needed in order to secure a loan for a borrower. They will examine your application and verify all of the information provided on it. If any parts of your application are unclear or require further clarification, they may ask you for additional information in order to complete your loan application file.
The Role of Your Loan Underwriter
Once the loan processor finishes assembling your application, your file will be sent over to the underwriting team. Here, an underwriter will double check your financial profile one last time to make sure all the necessary documentation is present and accurate. Then, the underwriter will decide to approve or deny your loan request. If approved, you’ll be on to the final step and begin coordinating schedules to sign all the paperwork and wrap up the closing. Finally, it’s important to know that we outsource processing, underwriting, or both.
Tips for Quick and Painless Mortgage Processing
Completing the mortgage loan process can feel never-ending—particularly when you are waiting to move into your dream home. Fortunately, there are several things you can do to speed up the
Make sure you provide your loan processor with all the necessary documentation early as possible and respond promptly to any requests.
Stay in touch with your lender. Communication is the key to making the loan process move along quickly and smoothly.
Proactively let your lender know if you have any changes in your insurance coverage or other things that may impact your loan.
Loan Processing Step-By-Step Procedures
• Loan Application & Processing
• Ordering for a Home Inspection
• Legal review of documents related to your property
• Detailed review of the title report
• Review of historical operating statements
• Detailed review of your prospective business plan for the property
• Conducting feasibility studies
• Review of all required entitlements, permits, licenses and approvals
• Insurance reviews
• Environmental assessment report (i.e. Phase I and II reports)
• Third party structural and engineering reports
• Underwriting & Closing
Note: Some type of loans like refinancing, bridge loan, gap funding, and construction may not
need the entire process to be completed.