Processing is where your application is heavily scrutinized and verified. The information you gave during your application, and how truthful you were, will determine how fast the processing stage goes. When your mortgage goes into the processing stage, your file is handled by a loan processor. It is extremely important for you to know the name and direct phone number of your processor. He or she will have to contact you on several occasions to complete the process.

The first thing that happens in processing is that your basic information is verified. Your name, social security number, current residence, and former residences are checked. When you submit your application, you should include a copy of your driver’s license, social security card, and one or two utility bills that help them verify this information.

Next, they will verify your work information. Place of employment, length of employment, and salary. Sometimes, they will verify this information for previous employers as well. To help speed this part along, you will need to provide a copy of your last 2 years of W2s. They might ask for the last 2 years of tax returns as well. The processor will also need your most current paystub, along with the 2 or 3 before it. When you first filled out your application, it asked for a work phone number. The phone number you gave them was likely your direct number instead of the main office line. Your processor will need both your direct number and the phone number to call to verify your employment with the company. Check your human resources department or your manager for this information.

If you are self-employed, it is even more important to give accurate and current information. In this case, the processor will need 2 years of tax returns. As well, he or she may want to obtain your profit & loss statements, W9 statements, or 12-24 months of business bank statements. If you have a corporation, you might need to provide your articles of incorporation. If a partnership, you might need to provide any partnership agreements that outline how your revenues are divided.

After verifying your home and work information, the processor will then assist you in scheduling your appraisal. Normally, you are responsible for the appraisal fee. It is either paid to the processor or the appraisers themselves. Often, a lender will allow you to choose your own appraiser. If you opt for your own, make sure that appraiser is fully licensed and accredited. The lender will still have to see the appraisal and do a “desk review.” This will determine if the appraisal is legitimate. There have been borrowers who have opted to choose their own appraisers and were burned because the desk review showed a flawed appraisal. In some cases, the appraisal value is inflated, and the desk review will re-value the appraisal. When that happens, the appraised value comes back lower than the original value, and the loan might be denied for lack of equity.

Finally, during the processing stage, your debts are scrutinized. If refinancing, the processor will obtain payoff information for your mortgage and any other debts you want to pay off. It’s during this stage that you have some leverage over your lender. Many times, when a payoff is requested, your current mortgage company will try to “upsell” you to keep your business. This is a fantastic opportunity for you to either get a better product from your current lender, or to force your prospective lender to match or beat the current lender’s offer.

In the short period of time between when your mortgage loan finally gets approved and closing time there are many things that you need to get done. This time can be hectic and you need to know just what needs to be done. You might not realize it but there are a bunch of things that you can do in order to help the process go smoother and faster. Generally speaking, the mortgage applies to both this document and the loan that is used to secure the property. Once you have decided on a piece of property that you would like to purchase, you then make an application to a lender for a mortgage loan. The lender uses information about your previous payment history, employment history, and income to determine whether or not to approve you for a mortgage loan.

Lenders do not allow home buyers to borrower mortgages loans for free. Instead, the lender charges an interest rate to the borrower. This interest rate can be higher or lower depending on the credit risk the borrower poses. The lender will communicate the total cost of your mortgage to you using an Annual Percentage Rate. The Annual Percentage Rate is expressed as a percentage and is the cost of your loan per year. Some home buyers would like a little assurance of the amount of money they will be able to borrower before home shopping. It does, after all, ultimately affect the price of the home that is purchased. Pre-qualification and pre-approval are two processes by which a borrower can be a little more certain about the amount of mortgage loan they can borrow.

It is important to note that pre-qualification and pre-approval are not the same. Pre-qualification provides the buyer with an estimate of the amount of mortgage that can be afforded. To pre-qualify a borrower for a loan, the lender make a decision based on income and debt information provided by the borrower. A pre-qualified amount is still subject to the approval process. Pre-approval, on the other hand, gives the borrower a more solid figure by which to base his or her home search. Except for the appraisal and title search, the lender completes all the work of a complete approval. This includes credit checks and employment verification. Know that you are not guaranteed a mortgage loan though either the pre-qualification or pre-approval process.

To approve you for a loan, the lender will require certain documents. This includes W-2′s, income tax returns, pay stubs, child support or alimony, bank statements for all of your accounts, and a copy of your credit report. It is best to start locating and collecting these documents as soon as you know you will be applying for a mortgage loan. Depending on your lender and the type of mortgage loan you obtain, you will have to pay a down payment. The down payment is the difference between the final sale price of the home and the amount of the mortgage loan. The mortgage process can be disconcerting for some home buyers, especially first-time home buyers. But when you understand the basic process, you’ll be much more prepared.