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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.

For many seniors, owning a home represents a significant portion of their wealth. However, sometimes the equity they have within that home is better served as a steady stream of income. This is where reverse mortgages come into play. Tailored to homeowners aged 60 or older, reverse mortgages allow eligible parties to convert a portion of their home equity into cash. In this blog, we'll explore the ins and outs of reverse mortgages, covering everything from how they work to the different types available and the reasons one might consider this option. Reverse Mortgages and How They Work A reverse mortgage is a financial product designed for homeowners aged 62 or older, enabling them to convert a portion of their home equity into tax-free funds. To qualify, homeowners must own their property outright or have a substantial amount of equity. The process involves a lender making regular payments to the homeowner, with the loan typically repaid when the homeowner sells the home, moves, or passes away. Different Types of Reverse Mortgages When it comes to reverse mortgages, there isn't a one-size-fits-all solution. In fact, when you work directly with your Loan Originator, they can tailor your reverse mortgage to fit your own individual wants and needs. Below are just a few of the different ways that you can receive the funds from your reverse mortgage: Lump Sum: If you'd prefer to receive the funds of your reverse mortgage up-front, you can choose a lump sum payment from your lender. This option is the only one that comes with a fixed interest rate. Equal Monthly Payments: You can choose to receive equal monthly payments as long as you use the home as your primary residence. Line of Credit: With a line of credit, you can receive a set amount of money upfront. This is popular if the borrower needs to pay for any home renovations or any other expense with a large lump payment. Term Payments: With this option, you can receive equal monthly payments for a term of your choosing. This would apply if you plan to live in the home for another 10 years and want to use your equity as a steady stream of income as long as you live there. If you're curious about which option is best for you, consult with your UMortgage Loan Originator for their expert financial advice! Is a Reverse Mortgage Right for You? Getting a reverse mortgage isn't a decision to take lightly. There are plenty of factors that go into the decision and a number of variables to consider before you put pen to paper. A reverse mortgage might be a good option for you if you don’t want the responsibility of making a monthly loan payment, can't afford to continue to make a monthly loan payment, or are unable to qualify for a cash-out refinance. As always, your UMortgage Loan Originator is a great resource who can find a reverse mortgage solution that is perfectly tailored to your unique financial situation. If you're interested in learning more, reach out to start the conversation!

As a homeowner, you’ve almost certainly heard of a refinance. What you might not know is that there’s a lot more to a refinance than simply just getting a new mortgage rate. In this blog, we’ll break down the basics of refinancing your mortgage, how they work, the different types of refinance, and the type of refinance that might work best for you. What is a Refinance and How Does One Work? A home refinance replaces your current mortgage with a completely new home loan. When you refinance, your new lender typically uses your new, refinanced mortgage to pay off your existing mortgage. This way, you’re left with one monthly payment that has a new interest rate and principal (or the total balance owed on the loan). If the following steps sound familiar, that’s because they are! The process for refinancing your home is a lot like your original mortgage process when you first bought your home ­— this time without the added stress of shopping for your home and competing offers on the home you’re itching to buy. Application & Locking Your Rate When you decide to refinance, you’ll need to submit an application with your income, credit score, and any current debts to ensure that you meet the eligibility requirements to refinance. Once you’re approved, you’ll be quoted with a new interest rate. Just like when you bought your home, you can lock your rate for up to 60 days to ensure you still have access to your quoted rate if mortgage rates rise. You can also have the option to float your rate; this means that you can potentially access a lower rate if they drop over time, but it also puts you at risk of getting a higher rate if they increase before you close. Underwriting & Closing Upon submission of your application and subsequent approval, your new loan will go through underwriting. During underwriting, your lender will cross-reference the financial documents and information you submitted for accuracy. They’ll also require a refinance appraisal to determine the value of the property you’re refinancing. This appraisal is key to a cash-out refinance, which we’ll cover in more detail below. Assuming you pass underwriting, it’s time to close your loan! Your lender or Loan Originator will send your Closing Disclosure (CD) which outlines all the final figures – including your new interest rate, closing costs, loan amount, and more. When it comes time to close, you’ll review the details of the loan, sign your loan documents, and pay any necessary closing costs. If you’re doing a cash-out refinance, this is when you’ll receive the money owed to you by the lender; but again, we’ll outline cash-out refinances in greater detail a little later. Different Types of Refinance So, now that you know how a refinance works, let’s cover the different types of refinances that are commonly used by homeowners. Below, we'll go more in-depth on rate & term refinances and cash-out refinances and expand on the ways that these two options work. Rate & Term Refinance The most popular type of refinance — and what you probably first think of when you think about a refinance — is a rate & term refinance. True to the name, this kind of refi simply updates the interest rate and the term (or the repayment length of your loan). Homeowners choose to get a rate & term refi when they want to lower their monthly mortgage payment. This makes the most sense for you if interest rates are significantly lower now than they were when you initially bought your home. Another option with a rate & term refinance is to shorten the term of your loan. This typically leads to a higher monthly payment but can significantly lower the total amount of interest paid on your loan. Cash Out Refinance If you’re looking to tap into the equity you’ve earned in your home to help pay for a home project or consolidate another debt, you might consider a cash-out refinance. When you get a cash-out refinance, you essentially replace your existing mortgage with a new loan that’s larger than your current loan balance. The difference between your existing mortgage balance and your new mortgage is the amount of cash you receive. It's crucial for homeowners to understand that the larger loan amount means higher monthly payments and increased overall interest costs over the life of the loan. Therefore, careful consideration and thorough financial planning are essential before opting for a cash-out refinance to ensure it aligns with their long-term financial goals. How to Know if a Refinance is Right for You Now that you know the basics of refinances, how do you know if a refinance is right for you? Consider the points below. If one of these situations resonates with you, then a refinance might be on the cards for you! Reduce Your Monthly Mortgage Payment The most common reason homeowners refinance their homes is to reduce their monthly mortgage payments with a lower interest rate. Before you refinance to lower your monthly payments, consider your break-even point after considering closing costs. If you think you’ll only live in and/or own this property for another couple of years, it might cost more to refinance than it would to keep your existing mortgage. Utilize Your Home Equity Your home is an investment that gives back as much or more than what you put into it. If you want to complete a kitchen remodel, pay off existing debt, or generally get some funds for a one-time expense, you can use a cash-out refinance to tap into the equity you’ve been building since buying your home. Change the Length of Your Loan If you are comfortable paying a higher monthly mortgage payment to reduce the amount of interest you pay over the life of your loan, you can get a rate & term refinance to shorten the term of your loan. If you shorten your loan from a 30-year to a 15-year, you’ll pay more upfront but less over time since you’re accruing less interest. Change Your Loan Type If you have an adjustable-rate mortgage and want to switch to a fixed-rate mortgage to have a more stable monthly payment, a rate & term refinance is a great option for you. The same can apply if you have an FHA loan and want to switch to a conventional, a conventional loan and you want to utilize your VA benefits, or generally see another loan program that might work best for your individual situation. It’s a great idea to consult with your UMortgage Loan Originator to get an expert’s opinion when changing your loan type. Eliminate Mortgage Insurance If you financed your home with an FHA loan or your down payment was less than 20%, you were required to lump Private Mortgage Insurance (PMI) into your monthly mortgage payment. Often, mortgage insurance can account for up to $200 of your monthly payment — those dollars really stack up over time! By refinancing to a conventional loan from an FHA loan or refinancing after having reached 20% equity in your home, you can refinance to eliminate your PMI payments from your mortgage. - There are plenty of great reasons to refinance your mortgage and a plethora of different types of refinances that can fit your unique financial situation. Your situation is unique, so if you’re still wondering what type of refinance might be best for you, reach out to your UMortgage Loan Originator for a personal consultation.