Applying for, and qualifying for a mortgage, has a lot in common with ballroom dancing. Partners step in and out with you, each taking the lead in their designated time and stepping back out to give the next in line a chance for a few turns around the dancefloor.
You’re certainly the belle of the ball, but let’s more closely examine the key people involved in facilitating the mortgage process alongside finding a home.
Real Estate Agents
A good real estate agent is worth their weight in gold. They’ll be able to give you the inside tip on newly listed properties, offer advice about the tax burden associated with different municipalities, and make the very important introduction to local mortgage brokers and lenders. Often they work closely with any number of lenders, including those who specialize in renovation loans or first-time homebuyers.
Mortgage Brokers and Lenders
When you apply for a mortgage, you’re not doing it alone. Mortgage brokers and lenders (kudos if you’re using local lenders who operate within your market!) Remember that pre-approval for a mortgage just means that you’re pre-approved as a borrower: your financial readiness has been established, but the loan won’t be underwritten until you’ve had a home inspection, selected lender-approved contractors (for 203K and HomeStyle renovation loans) and had the property appraised.
The Big G gets an opportunity to lead around the dancefloor if you’re seeking out FHA, Fannie Mae or Freddie Mac mortgages. Agencies like HUD (Housing & Urban Development) and the FHA (Federal Housing Administration) exist largely to make homeownership more equitable and accessible; Fannie Mae and Freddie Mac are public government-sponsored enterprises (GSE) help carry that primary mission by offering FHA-backed loan products.
Real Estate Processors
Processors confirm financial and personal data from loan applicants and assist in the drafting of documents for the appraiser in preparation for closing, review and analysis of the loan documents. They’re typically responsible for the examining the conditions of the mortgage loan, ensuring that they are accurate and in compliance.
Processing the loan through to completion is an important job, and you’ll likely get to know the processor very well through your mortgage lender.
Other key partners in the mortgage process include home inspectors, appraisers, escrow companies and real estate attorneys. If you’re moving forward with a 203K Standard Loan, HUD consultants, engineers (in addition to contractors and other vendors) may be involved as well if the size and complexity of your renovation warrants their involvement.