Mortgage 101: I'm Under Contract....Now What? - Steps To Ensure A Successful Loan Closing

Posted by Eric Evans on 2:59 AM with 3 comments
First off, congratulations!  You’ve found a home you love and are legally under contract!  These next steps will outline your responsibilities and what you should expect throughout this process.  It is RANLife's goal to effectively complete each step and get you the keys to your new home!  To help us accomplish this you should be familiar with:

RANLife Home Loans, Under Contract, Buying a home


GOLDEN RULE #1 – Don’t change your financial situation or credit score.

  • DO NOT start any new loans, don’t consolidate loans right before closing, don’t co-sign for anything, don’t get a car lease, don’t apply for new credit cards etc.  A no-score credit report is pulled right before closing and they will check to see if any new debts have been created.

  • DO NOT make any late payments, do not increase your credit card balances or any other thing that would lower your credit score.

  • DO NOT change jobs, don’t switch positions from a W2’d position to full commission based income, don’t quit your job and start your own business in the middle of the loan process etc.

  • You were approved under your current situation.  If your credit, debt, hours scheduled or income changes during the loan process, that could affect your approval and may change the outcome of your home loan.  Consult your loan officer if something arises and please inform them of any changes in your job immediately.  This includes going from full time to maternity pay.
Now, let’s get started:

1)    Provide a copy of your real estate contract ASAP to your loan officer. Time is of the essence.  Getting the earliest start possible to process your loan will ensure we meet your deadlines.  If you’re buying at the very top of your pre-approved range, we should review the amount of property taxes you would pay with the selected property.  This will ensure that your payment is not pushed over your limit.  You should also inform us of any HOA fee’s as these are typically not included in pre-approvals.

2)    Schedule your home inspection ASAP. Inspections are not required but are highly recommended.  The inspection should be completed within 3 days of getting under contract.  Once you get satisfactory results, inform us that you’re ready to proceed for the appraisal.  If things didn’t turn out so well, let us know what you wish to do.  We can renegotiate some repairs if needed or worst case, cancel the contract. If it’s a bank owned home, your agent should make sure the utilities are on so that a thorough check can be completed and an appraiser will not need to revisit the property.

3)    Appraisal. We must ensure the home value equals the purchase price.  The appraiser will also note if the home meets the standard safety guidelines for your loan program and will note any repairs needed prior to closing.  This is done by a third party and they are paid up front.  Appraisers are selected at random and must be ordered through the Lender.  A typical cost of an appraisal is 400.00 paid via credit card.  We collect for this upon getting under contract to schedule the appraisal the day after your inspection.  This will take roughly 1 to 1.5 weeks to complete.

4)    Provide all information requested….ASAP. There are multiple documents that may be needed throughout the process.  Please Fax or email all information and documents to your loan officer as they request.  Time is of the essence and any delay on your end can and mostly likely will delay the closing.  Just prep yourself that multiple requests will be issued.  Processors review files and underwriters will also request additional information.  Every case is different with the specifics required.  But remember, it’s just part of the standard loan process.

5)     Lock or float your loan rate. Typically this is done after the inspections have gone well and you know you’re moving forward.  Call your loan officer when you are ready to lock your rate.  There is no crystal ball and ultimately it’s up to you doing decide if you want to lock in or not. We’re here to help and discuss your rate options with you.

6)     Select your homeowner’s insurance policy.  The insurance agent of your choice will need a copy of the appraisal to give you an exact quote.  Once you have the appraisal report, and you have selected a homeowner’s insurance company, please give their contact info to your loan officer.  The policy must cover the loan amount and can have no more than a 5000.00 deductible.

7)    Ensure closing funds are available at least one week prior to closing.  Funds from stocks, bonds, etc...Should be available in your account one week prior to your scheduled closing date.  Lack of verifiable funds can delay your closing.    Speak to your loan officer about where your down payment money is coming from.  They can tell you the proper requirements and structure needed.  Not all sources of money are acceptable.  You cannot take out a loan for a down payment.  Gifts can only be given from family members, etc.   When applicable, gifted funds should be documented with acceptable gift letters and proof of funds from both the person giving the gift and the receiver of the gift.

8)    Schedule your closing appointment. After your loan is complete, coordinate a time and date with your real estate agent and your loan officer and we will schedule an appointment with the title company.  You should not schedule a closing prior to your full loan approval.

9)    Closing.  You’re finally ready to sign!

  • Take your driver’s license– When signing, you will need government issued, photo ID with you.  The most common form is your driver’s license.  Make sure its current as an expired license is not acceptable.  State issued, photo ID is acceptable and also a valid passport.

  • Take the funds to close – Although you will know the rough amount due at closing, the exact figure will be provided by the title company typically the day of closing or 24 hours in advance.  They do the final adjustment to any amount collected for taxes.  When we have the final figure, you must provide the funds in the form of a cashier’s check, bank check, money order or wire.  All checks are made out to the title company.  If your cash to close is $10,000 or more, then you MUST send a wire. Wire instructions will be provided. Personal checks or cash are not acceptable funds.

  • Funding and completion – In most states, the money for your loan is wired from RANlife to your title company prior to the signing.  This results in an immediate funding. In the states of AZ, CA, ID, LO, NV, NM, TX, WA and WI, the funding is typically 24 hours later.  If your purchasing in one of the above states, the signed loan documents are reviewed after signing and the money is wired to the title company the following day (wire cutoff times are typically 1:00 PM).

After all docs are signed and the money has been distributed – The title company will take the deed to the county courthouse and officially record the property in your name!  Then you’re a homeowner and you will receive the keys from your realtor.

CONGRATULATIONS!

It's that easy! Now don't be scared because RANLife will be there to help you every step of the way.