The process of mortgage loan origination and real estate purchase
Step 1: Families interested in home buying visit the mortgage broker’s office to complete a preliminary loan application, providing evidence of the applicant’s income, debts, and the amount of money available for a down payment.
Step 2: The mortgage broker receives a copy of the applicant’s identification documents (e.g. driver’s license, passport, etc.) as well as income-related documents (e.g. copies of tax returns or paychecks) and allows the applicant to obtain a copy of their credit report from one of the three credit bureaus (Transunion , Equifax or Experian).
Step 3: The mortgage broker conducts an analysis of applicants’ income, debt and credit history and determines whether applicants are eligible for mortgage financing. Once the applicants have qualified for a mortgage loan, the mortgage broker uses their income to calculate the maximum possible loan volume and the maximum possible purchase price for a house.
Step 4: The mortgage broker then gives applicants a letter stating that they are approved for a certain amount of credit.
Step 5: Applicants can now hire a licensed real estate agent to help them find a home to buy that is within the mortgage broker approved price range.
Step 6: Once the applicant and their real estate agent have found a home they are interested in buying, they submit a written offer to buy to the seller. If the seller accepts the offer, the parties sign a binding sales contract.
Step 7: The purchase agreement and a down payment from the buyer (usually 1% of the purchase price) are now sent to a trust company (Title Company), which holds the property in trust. The trust company then conducts an ownership review of the property to ensure there are no third-party liens.
Step 8: The applicants hire a qualified house inspector to examine the property for any structural damage and to ensure that the house is free of defects.
Step 9: Applicants receive a market valuation from their real estate agent or an appraiser to confirm the property’s market value. This must be at least equal to the purchase price.
Step 10: Applicants provide the mortgage broker with the latest proof of income and debt to complete their mortgage loan qualification. The lawyers are commissioned to prepare the final documents.
Step 11: The parties take part in the closing in the title company, where all closing documents are signed. After signing, the applicants deposit their 10% deposit with the title company. Auxilium then transfers the agreed loan amount to the title company.
Step 12: As soon as all closing documents have been signed by the seller and buyer and the purchase price has been fully deposited with the title company, the title company transfers the purchase price of the property to the seller. The title company then issues its title insurance policy to Auxilium, which guarantees the first rank of the mortgage on the property.
With our standardized 12-point procedure, we ensure that all financing meets our strict requirements.
Or you can get more information about the Auxilium model in our synopsis.