UNDERWRITING: LOAN CONDITIONS
Mortgage underwriters make sure the loan package is correct and complete. The amount of time to underwrite has decreased because of automation. With today’s data storage options and access lenders increasingly have direct channels which allow them to quickly get banking, income, and tax information. Borrowers must submit all documentation requested by the lender’s underwriting department. Meeting these conditions is essential to move the loan toward closing. The underwriter must verify the accuracy of all information provided in the loan application and confirm that the borrower has the financial ability to repay the loan.
CLOSING: CLEAR TO CLOSE
Once you meet all of the conditions, the underwriter will issue a “clear to close.” That means you are ready to finalize the deal. At this point, the lender will generate the Closing Disclosure (CD) and provide it to you. A CD is a five-page form that provides final details about the mortgage loan you have selected. Unlike the Loan Estimate (LE) that you received at the very beginning of the process the numbers in the CD are not estimates, they are meant to be precise and final. The CD includes the loan terms, your projected monthly payments, and how much you will pay in fees and other costs to get your mortgage (closing costs). You must sign it, and then, according to federal law, there is a three-day waiting period after it is signed before the loan can be closed. This is meant to ensure that you (the borrower) has sufficient time review and fully understand the costs.
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