The Mortgage Process: What to Expect

Podcast Transcription

Money Talk is a podcast brought to you by PFCU, where we will share tips and tricks and talk to the experts on all things finance related. Join us as we cover everything from credit and loans to cybersecurity and careers.  No matter where you are in life, PFCU is here for you.

Maddy: Welcome to another episode of PFCU's Money Talk podcast. This is a continuation of talking about mortgages and buying a house.  And with me, I have Sarah here from PFCU's mortgage department. Hi!

Sara: Hello! How are you?

Maddy: I'm good. How are you?

Sara: Good.

Maddy: Could you tell us how long you've been, not only with PFCU, if you've, you know, you've done mortgages elsewhere, but how much experience you have? 

Sara: I have been in the financial industry for probably about 27 years and have been with PFCU and our mortgage team for the past seven and a half. 

Maddy: Nice. Alright.

Sara: Yes.

Maddy: So, we're going to talk a little bit about the mortgage process and what that looks like.

Sara: Sure.

Maddy: Could you share how someone gets approved for a mortgage?

Sara: Absolutely.  So, the borrower will start with submitting an application. It will allow us to determine if they qualify for a mortgage and what products they may be available for. We usually encourage people to apply through our website; it's just the quickest way to get it in front of a loan officer to have us review their info. 

Maddy: Awesome. And once the application is submitted, what happens next? 

Sara: Once we have their information, we will start by evaluating their credit history, employment, income, assets, and the property. So, we're looking at, do they have the ability to repay the payment?  Do they have the down payment for the mortgage and also closing costs? And is the collateral, is it good collateral? Are we going to be able to lend on this property?

Maddy: Okay. What should people be prepared for as far as documentation? What do you guys need on your end from someone who's applying for a mortgage?

Sara: First, the borrower will be required to authorize us to pull credit. The member will also be required to submit proof of employment history with income information. That could be pay stubs, W-2s, tax returns or 1099s for self-employed borrowers. Their asset documents, which could be bank statements, 401k documents, and then any other documentation that is needed to support the loan. 

Maddy: Awesome. Is there a list on the website of all the things that people need? 

Sara: Absolutely. It is all on the PFCU website. 

Maddy: Go check out that list and you can probably just check off everything as you, as you get it all around. 

Sara: Absolutely.

Maddy: Is there any fees collected upfront?

Sara: No fees are collected until after we have submitted the loan for approval from our underwriting team.  At that point, we'll have to make sure that you have been given a loan estimate that gives details of all of the loan charges and fees and that you indicate that you intend to proceed with the loan. At that point, we will collect funds to pay for the appraisal and in some cases, the cost of the credit report. 

Maddy: Okay, so, you have the application, you have all the documents, and the appraisal has been ordered. What happens next? 

Sara: We'll continue to evaluate all information as it comes in, including any additional requirements for the approval. We send the file to be decisioned by an underwriter. They'll order the title commitment to make sure that the collateral can be transferred to the new purchaser or in cases of a refinance to make sure that the borrower has a clear title to the property and all taxes are paid to date.

Maddy: So now moving on to closing on your loan. When can someone do that? 

Sara: Once we have the clear to close from the underwriter and all the conditions are met with the title insurance, then we will contact all parties to coordinate a closing. The timing of the process can vary depending on what type of loan it is. Most loans are closing within 30 days though, but it can be sooner if things move quicker through the process. 

Maddy: Okay. What can people do to make sure that the home buying or refinancing process goes smoothly?

Sara: Just to be prepared. For a purchase, make sure that you get pre-qualified. Make sure that you collect your documents and have them available so that when you're asked for them that you have them ready. And make sure that you have your budget. Review your credit. Make sure your credit report is unlocked. Those will all help things move smoothly throughout the process. 

Maddy: Perfect. And in the previous episode, we talked with Julie about home buying tips. So, if you haven't listened to that yet, she does touch on some of this that Sara is talking about. So, very helpful information on how that process looks. Thank you for sharing.

Sara: Absolutely.

Maddy: Is there anything else you wanted to share while we're here today?

Sara: Just to reach out. If you have questions throughout the process, we're here to assist.  We want to make this go as smoothly for you as possible. And we want it to be a good experience. So, just give us a call, let us know how we can help you. 

Maddy: Perfect. Thank you so much.

Sara: No problem.

Money Talk is a podcast brought to you by PFCU. PFCU offers many products and services to fit your needs from our various loan and account options to our team of financial coaches to help you reach your goals. Make sure to take advantage of the many conveniences PFCU offers, such as the mobile app, mobile wallets, bill pay, and more. Visit our website at pfcu4me.com to learn more. PFCU is an equal housing lender and is federally insured by the NCUA.