Mortgage Credit - Residential Properties

Step 1: The Famous "1003"

Everything begins with a loan application officially called the Uniform Residential Loan Application, or URLA.

Nobody calls it that.

Everyone in the mortgage industry simply calls it the 1003.

Whether you're a first-time homebuyer, your mother, your drinking buddy, your yoga instructor, your favorite bartender, or a billionaire CEO applying for a $5 million vacation home...

...everyone fills out the exact same application.

The 1003 tells us who you are, where you work, what you earn, what you own, what you owe, where you've lived, and what you're trying to accomplish.

Think of it as your financial autobiography.

Step 2: Credit

Once your application is complete, we obtain your credit report.

We're obviously interested in your credit score, but that's only part of the story.

Your credit report also tells us:

-What debts you currently owe

-Your monthly payments

-Your payment history

-Credit card balances

-Student loans

-Auto loans

-Previous mortgages

-Collections, bankruptcies, judgments, or other credit events

Your credit report becomes one of the primary pieces used to determine what loan programs you qualify for.

Step 3: "Prove It."

Now comes the fun part. Everything you told us on your application has to be documented.

If you told us you earn $120,000...

...we have to prove it.

If you said you have $80,000 in savings...

...we have to prove it.

If you said you've worked for your employer for five years...

...you guessed it.

We have to prove it.

That means collecting documents like:

-Pay stubs

-W-2s

-Tax returns

-Bank statements

-Retirement account statements

-Investment statements

-Gift documentation

-Employment verification

And sometimes a few other surprises along the way.

We're also confirming that your income matches what you reported, your assets are sufficient for your down payment and closing costs, and that everything complies with the lending guidelines.

All of that takes time.

Step 4: Underwriting

This is the part that most borrowers love to hate.

An underwriter's job is not to approve loans quickly.

An underwriter's job is to make sure the bank is making a safe loan.

Every document you submit gets reviewed.

Every.

Single.

One.

Sometimes you upload a bank statement.

The underwriter notices a large deposit.

Now they have to ask where it came from.

You answer that question.

During that review they notice another item.

Now they have to ask about that.

It can feel like they're nitpicking every financial decision you've ever made.

In reality, they're doing exactly what they're hired to do.

When someone is lending you hundreds of thousands of dollars, you're likely to experience one of the highest levels of financial scrutiny you'll ever face in your life.

It's not personal.

It's underwriting.

Step 5: Closing

Eventually all of the conditions have been satisfied.

Your loan receives final approval.

Closing documents are prepared.

You sign approximately 8,427 pages. (Okay...it's not quite that many. It just feels that way.)

Then you get the keys.

And within about two weeks everyone forgets how stressful the process was.