The Basics

What to Expect with Your UMortgage Loan Process

Published: April 18, 2024

What to Expect with Your UMortgage Loan Process

Mortgages can be complicated. That’s why, at UMortgage, we’ve broken down the loan process into 8 easy digestible steps. A strong buyer is a well-informed buyer, so to help you know what to expect every step of the way, let's walk you through the 8-step mortgage process from pre-approval to your first mortgage payment.

Step 1: Pre-Approval

To set yourself up for a successful homebuying experience, you must first work with your UMortgage Loan Originator to get pre-approved for your future home loan. Not only will your pre-approval give you an accurate budget to help you shop for homes, but it will also expedite your approval process once you’ve had an offer accepted on your home-to-be.

Your pre-approval is a document from your lender stating that they are willing to let you borrow a certain loan amount based on your creditworthiness, income, and other financial considerations. In a competitive housing market, a strong pre-approval can go a long way to help you stand out among the sea of competing offers. This first step demonstrates that you are a serious buyer by proving that a lender is willing to provide the loan necessary to purchase the property on your shopping list.

Once you’re pre-approved, you will have a quoted figure that you can use to help yourself narrow down your home search to those that are in your budget. Pre-approvals typically last up to 90 days, so be in contact with your UMortgage LO as you shop to make sure your pre-approval is up to date for a smooth homebuying process!

Step 2: Application Submitted

Once you’ve worked with a real estate agent to shop for homes and have had your offer accepted, it’s time to apply for a mortgage! This is where your pre-approval will come in handy because the financial documents that are used for your pre-approval are the same documents needed to apply for your mortgage.

When you’re filling out your mortgage application, you can talk with your UMortgage LO to figure out the loan product that will work best for your financial situation. Once your application is complete and submitted, our Operations team will verify your credit, income, and other supporting documentation submitted with your application.

Step 3: Disclosures

The next step for your loan is disclosures. This step provides you with an overview of the specificities regarding your loan, including your loan terms, mortgage rate, rights, and a full breakdown of all fees associated with your mortgage.

After your application and documentation have been verified, it moves to disclosures. During disclosures, our Operations team compiles estimates for all fees associated with your mortgage, including title fees, closing costs, and other third-party fees.

Once all necessary fees have been confirmed, your loan disclosure will be sent. This document outlines your loan amount, mortgage rate, required down payment, closing costs, and estimates of third-party fees. When you receive this document, it’s crucial that you sign these documents as quickly as possible to avoid any delays and get you into your home faster. After signing your closing disclosure, your loan team will order an appraisal and all third-party services.

Step 4: Appraisal & Third Parties

As your loan awaits processing, UMortgage orders an appraisal on the home and any other requested third-party services such as an inspection, title services, and more.

Appraisals assess the fair market value of the property being purchased. Lenders require an appraisal to be conducted on every property they’re helping finance to ensure that the property is worth the amount of money being loaned to the borrower. This step protects you and the lender from overpaying or lending more than the property's actual value.

Appraisals are conducted by certified and impartial third-party professionals who have no vested interest in the outcome of the transaction. These third-party appraisers thoroughly evaluate various aspects of the property, including its size, condition, location, and comparable sales in the area.

Step 5: Processing

When your loan is in processing, it’s being assessed by a Processor on our Operations team. The Processor’s job is to ensure all financial documents associated with your loans are accurate and verified. Throughout the processing phase, you may be contacted by your loan’s Processor with any updates and requests for other supplementing documents to ensure your loan passes underwriting and is approved.

Once they receive your loan, your Processor will be your main point of contact. You can expect them to reach out for a formal introduction when your loan enters Processing.

As soon as all the necessary information has been collected and approved by the processor, they will submit your loan to the lender’s underwriters who do one final review of all the documentation before deciding to approve or deny the mortgage.

Step 6: Initial Approval

After your loan is approved by underwriting, your next step in the loan process is initial approval. During this stage, your UMortgage team might reach out for a few more pieces of documentation to get your loan across the finish line. These requests are a completely normal part of this step in the mortgage process, so don’t panic if you’re asked to send new or updated documents!

After all conditions have been met, you’ll get your final closing disclosure which, like your initial closing disclosure, outlines your loan amount, mortgage rate, closing costs, and all other fees that you’re required to pay to close your loan. Unlike your initial closing disclosure, the figures on your final closing disclosure are the exact fees and terms associated with your mortgage. When you sign your closing disclosure, you’ll close three days later.

Step 7: Cleared to Close

When you’ve reached step #7, your loan is cleared to close! This means that you’re one final step away from homeownership! When a loan is cleared to close, that means it has passed underwriting and been fully approved by your lender.

Before you head to your appointment to sign the final paperwork and close on your home, you’ll need to secure the required funds that have been outlined in your final signed closing disclosure. You’ll pay these funds with either a cashier’s check or a wire transfer.

Please note that you will NEVER receive wire instructions from a UMortgage team member. If you do, please report it immediately. Only your Title company will reach out with wiring instructions once your loan is cleared to close.

Closings most commonly take place at a title company or real estate office with your real estate agent, title agent, the seller’s agent, and any co-borrowers purchasing the home with you.You’ll need to bring a state-issued photo ID and all documentation related to your purchase, including proof of homeowner’s insurance and a copy of your purchase contract.

Expect to spend up to an hour at the closing table, carefully reviewing and signing a multitude of documents, including the mortgage agreement, title deed, and various disclosures. Once this paperwork has been signed, the keys are handed over and you’re officially the owner of your new home!

Step 8: Funding

The final step of your mortgage process is the funding of your loan. Here, your lender contacts the seller’s agent to distribute the funds needed to complete the purchase of your home. After funding, you’ll hear from your UMortgage LO with more information on paying your first mortgage payment and a request for feedback on your mortgage experience.

Your first mortgage payment will likely be due the first of the month 30 days after your closing date. So, if you closed on April 10th, your first mortgage payment would be due on June 1st.

When it comes time to make your first mortgage payment, please take a look at the final documents signed at closing for all the details including your exact payment and due date. You also may receive correspondence from the new servicer via email or postal mail about where and how to make future mortgage payments. If you have any questions about your mortgage payment, feel free to contact your UMortgage Loan Originator.

Finally, purchasing a home is part of the public record. After you close, you will most likely receive various forms of spam. Wire fraud is on the rise in the mortgage industry and the last thing we want is for you to become a victim.

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PurchaseNovember 14, 2024

Your Comprehensive Guide to Home Inspections

Buying a home is one of the most significant investments you can make. Once a homebuyer finds the home they want to submit an offer on, one of the most common questions is whether or not they should get an inspection. Getting an inspection on the home you want to buy has plenty of benefits. Some loan types require them and some don’t. We put together a comprehensive guide to help you make a confident decision regarding your potential inspection when you’re preparing to submit an offer on a home. What is a Home Inspection and How is it Different Than an Appraisal? A home inspection is an objective assessment of a property's overall condition, performed by a licensed professional. During the inspection, key components of the home—including the roof, foundation, electrical systems, plumbing, and HVAC—are thoroughly reviewed to ensure they are functioning properly and free of major issues. The primary goal of this process is to identify potential problems that could require repairs or impact the home's value. Unlike an appraisal, which focuses on determining a property's market value, a home inspection emphasizes safety and structural integrity. This distinction is crucial because it gives buyers a clear understanding of the true condition of the home they’re committing to before finalizing their purchase. While they might seem similar, an inspection is much different than an appraisal. First and foremost, professional appraisals are required for every mortgage type, including refinances. An appraisal evaluates the home's condition, features, location, and recent sales of comparable properties in the area. The primary purpose of an appraisal is to ensure that the lender is not lending more money than the home is worth, which protects the lender’s investment. While an appraisal determines the market value of a property, a home inspection assesses the home's physical condition. Appraisers perform a broad overview to establish value, checking factors like square footage, amenities, and general upkeep. Inspectors, on the other hand, dive deeper into the safety and functionality of the home's systems and structure, identifying any existing or potential issues. What Loan Types Require an Inspection? It’s important to note that most lenders do not directly require a home inspection for certain loan types. However, there are specific loan programs with unique conditions that encourage or necessitate this step. For example, Federal Housing Administration (FHA) loans require an appraisal with specific property standards. While technically not an inspection, this appraisal includes a health and safety review that flags potential issues. If the home does not meet these standards, repairs must be made for the loan to be approved. VA (Veterans Affairs) loans also require an appraisal that assesses the home for Minimum Property Requirements (MPRs) to ensure it is safe, sound, and sanitary. Like FHA loans, while this appraisal is not a full home inspection, it may prompt buyers to pursue one to identify any underlying issues the VA appraiser did not cover. Conventional loans don’t mandate an inspection, but many lenders and experts recommend one on top of the required appraisal. While the inspection itself might not be a formal requirement to secure your mortgage, it's important to understand the standards that different loan types must follow to keep you in the loop and help you make informed decisions. What Are the Benefits of Getting an Inspection? Opting for a home inspection offers numerous advantages that make it well worth the investment. Overall, it helps buyers avoid surprises and expensive repairs. Discovering issues like faulty wiring, plumbing leaks, or foundation cracks before purchasing gives buyers the power to negotiate with the seller for repairs or price adjustments. This often leads to a better final deal and lowers financial risk post-closing. A home inspection also serves as an educational experience for buyers. During the process, inspectors can point out maintenance needs, provide advice on how to handle certain issues and share information that will help buyers maintain their homes more effectively. This proactive learning helps homeowners feel prepared and confident in their ability to manage their property. Another significant benefit is peace of mind. Even when no major problems are found, an inspection reassures buyers that the home they are investing in is safe and solid. For first-time homebuyers, this assurance can be particularly valuable, allowing them to proceed with fewer doubts. Inspections aren’t mandatory for every home purchase and in some cases, the lack of an inspection can strengthen your offer in a competitive market. However, most real estate professionals recommend that buyers include a home inspection contingency in their offer. This provision allows buyers to renegotiate or withdraw if major issues arise, protecting them from unforeseen, costly repairs and enhancing confidence in their purchase decision. By uncovering hidden issues early, buyers can negotiate repairs, adjust their offer, or walk away if necessary. This transparency helps prevent unexpected expenses after closing and provides peace of mind to new homeowners. While home inspections are an additional step and cost in the homebuying process, their value far exceeds the price. By uncovering hidden issues early, buyers can negotiate repairs, adjust their offer, or walk away if necessary. If you want to learn more about home inspections in the mortgage process or want to connect with a Loan Originator to guide you toward homeownership, follow this link and fill out the form to get started.

MortgageOctober 25, 2024

Tips to Navigate a Changing Housing Market

In today’s fast-paced real estate environment, adapting to change is essential. We’ve seen first-hand that the market can be unpredictable. However, with the right strategy and the right team in your corner, there’s plenty of opportunity for you to thrive. Here's how you can collaborate with UMortgage to navigate these challenges and find success. Work With a Local Expert One of the biggest advantages you can get in any housing market, let alone one that changes quickly, is local expertise. National headlines paint a broad picture, but every neighborhood has its own dynamics. By partnering with one of UMortgage’s local mortgage experts, you can dive deeper into the market conditions affecting your area to make informed decisions while you shop for your home. UMortgage is proud to have Loan Originators who are rooted in their local communities and can offer in-depth expertise on the market dynamics of specific neighborhoods. When you choose to work with a UMortgage LO, you’ll get inside knowledge on regional trends, mortgage rate movements, and inventory fluctuations to help you shop with confidence. With the right information in your toolbelt, you can ensure you're acting at the best time to buy or own your home without unneeded financial strain. Understand the Economics Behind the Market A changing market can feel daunting, but it’s important to remember that real estate is driven by fundamental economics. Your LO can break down these key drivers—such as interest rates, inflation, housing supply, and demand—so you understand not just what’s happening, but why. This insight is especially helpful for homebuyers who may feel unsure about jumping into the market during periods of fluctuation. If you're a real estate agent, having a solid narrative behind these changes can set you apart when trying to win over a prospective buyer. Being able to clearly explain why certain trends are happening will build trust and reassure your clients that you're the go-to person for real estate advice. With UMortgage’s help, you’ll always have up-to-date market insights to share. We publish a weekly blog every Monday at noon sharing digestible insight into recent mortgage rate movements and a forecast of market-impacting events on the horizon. Check it out here every week to see the different pieces of economic data that will make mortgage rates shift to stay ahead of the curve. Find Your Niche and Strengthen Your Knowledge In a diverse market, it’s important to find a niche where you can specialize. As a real estate agent, honing in on a specific area—whether it's first-time homebuyers, military homebuyers, or investment properties—can set you apart. With UMortgage, we offer a wide range of loan products to tailor a mortgage to a client’s specific financial goals. When you specialize, you can provide better service, and we can match you with the right mortgage product to strengthen those client relationships. Homebuyers can also benefit from this strategy by working with a LO who understands their unique circumstances. Whether you're a veteran using a VA loan or a self-employed borrower with a more complex financial picture, finding the right loan product will make all the difference when your loan reaches underwriting. Managing the Emotions of the Homebuying Experience Finally, it’s crucial to manage the emotional rollercoaster of real estate transactions. Buying a home can be stressful, and market changes can add to that pressure. But don’t worry—we’ve seen it all. Your UMortgage LO is here to guide you with clear, rational advice that helps you stay focused on your long-term goals. By working closely with your UMortgage LO, you'll have the right combination of local knowledge, market insight, and emotional support to stay resilient through the ups and downs. The real estate market may be ever-changing, but that doesn’t mean it’s impossible to succeed. With the right LO by your side, you can navigate these shifts confidently. At UMortgage, we’re committed to helping you find the best path forward, no matter what the market throws your way.

The BasicsOctober 11, 2024

Spruce Up Your Fall Open Houses With This Checklist

Autumn is the perfect time to create a warm, welcoming atmosphere that invites buyers to envision themselves living in the home they're visiting. As the weather cools and the leaves start to turn, real estate agents have a unique opportunity to set the mood for open houses by adding a touch of seasonal charm. With just a few simple touches, you can help potential buyers feel at home while also reminding them of important fall maintenance tasks. Here’s a checklist to give your open houses that cozy, autumnal vibe while also emphasizing the importance of seasonal upkeep. 1. Set the Mood with Fall-Scented Candles or a Simmer Pot When potential buyers walk into a home, the first thing they’ll notice is the atmosphere. Scents are incredibly powerful, so setting the right mood with fall-scented candles or a simmer pot with seasonal spices is a must. Opt for warm, inviting aromas like cinnamon, pumpkin spice, allspice, or cedarwood. These scents create an immediate sense of comfort and coziness. Tip: Choose subtle, natural fragrances to avoid overwhelming guests. You want the scent to be pleasant, not overpowering. For a fall-scented simmer pot, slice an apple, an orange, and a lemon and add to a saucepot. Sprinkle them with a tablespoon of nutmeg and ground ginger and add up to 5 cinnamon sticks. Cover with water, bring to a boil, and lower the heat to simmer for as long as desired. 2. Incorporate Seasonal Decor Fall is all about beautiful colors and textures, so why not bring those elements into your open house? You don’t have to go overboard—just a few tasteful touches will do the trick. Think decorative pumpkins, a simple wreath on the door, cozy throw blankets, and vases filled with autumnal foliage or wheat stalks. Tip: Neutral tones and natural materials, like wood and cotton, blend well with most interiors and help potential buyers focus on the home itself, not just the decor. 3. Create Cozy, Inviting Spaces Fall is the season of warmth and relaxation, so highlight areas of the home that encourage comfort. Stage the living room with plush pillows and soft throws or set up a reading nook with a comfy chair and a stack of books. If the home has a fireplace, make sure it’s clean and staged, and consider lighting it for the event (if it’s a gas fireplace) to showcase how the space could feel on a chilly evening. Tip: Dim lighting and warm, ambient lamps create a relaxed atmosphere that makes the space feel more intimate and inviting. 4. Highlight Outdoor Spaces with Seasonal Touches Don’t forget about the exterior! Add seasonal touches to the front porch or backyard to make outdoor spaces shine. A simple pumpkin arrangement or a few pots of mums can make a big difference. Clean up leaves and debris to ensure the yard looks well-maintained. Tip: Don’t forget to highlight the potential for cozy outdoor living. Adding a fire pit, some string lights, or a patio heater can inspire buyers to imagine gathering outside even in cooler weather. Seasonal Maintenance Tips to Share with Buyers In addition to creating a cozy atmosphere, fall is an important time for homeowners to tackle seasonal maintenance tasks. By offering these tips during an open house, you can help buyers think ahead and show that you’re a knowledgeable resource. 1. Turn Off Outdoor Spigots and Drain Hoses One of the most important fall tasks is to turn off outdoor spigots and drain hoses before freezing temperatures arrive. Remind buyers that failing to do so can lead to burst pipes, which can cause costly damage. Tip: Suggest purchasing insulated faucet covers to protect outdoor water sources during the winter months. 2. Clean Gutters and Downspouts Fallen leaves and debris can easily clog gutters and downspouts, leading to water damage when the rain starts. Make sure buyers are aware of this essential task to prevent overflow or ice damming during winter. Tip: A gutter guard can help reduce the amount of debris that accumulates, saving time and effort in the long run. 3. Trim Dead Limbs and Clean Up Spent Plants Fall is the perfect time to trim dead or damaged tree limbs to prevent them from breaking under the weight of snow or ice. It’s also a good idea to clean up spent plants and flowers from garden beds to give the yard a tidy appearance and prepare for next spring. Tip: Encourage buyers to save time in the spring by planting bulbs in the fall that will bloom early next year, like tulips or daffodils. 4. Inspect and Seal Drafty Windows and Doors With cooler weather coming, now is the time for homeowners to check windows and doors for drafts. Encourage buyers to inspect the home’s seals and weatherstripping to prevent heat loss and save on energy bills. Tip: Window insulation kits and door draft stoppers are affordable and effective ways to block cold air from seeping in. Adding fall vibes to your open houses is more than just setting the mood—it’s about helping potential buyers feel comfortable, welcome, and excited to imagine themselves living in the space. By combining seasonal decor and cozy touches with important homeownership tips, you’ll not only create a memorable experience but also position yourself as a trusted resource for your prospective buyers.