Key players in the home loan process
Whether you’re looking to buy a home or refinance your current home loan, you’ll probably speak with a number of different professionals along the way. Here’s a quick overview of who they are, what they do and how they may help you in the loan process.
Mortgage loan officer
Your loan officer will provide you with detailed information so you can determine the loan that best fits your needs. You can expect your loan officer to help you with:
- Assembling all the required paperwork for loan Glossary Term: prequalification or conditional approval and preparing prequalification and/or conditional approval letters for you
- Coordinating all of your paperwork
- Reviewing your income and expenses, assets and credit history
- Sending your information to the loan underwriter for review
- Providing you with disclosures that explain loan fees, terms and conditions
- Keeping you informed throughout the process and giving you information so you can understand your home loan
Your real estate professional
If you are looking to buy a home, your real estate professional (sometimes also referred to as the buyer’s agent) will help you find properties for sale that fit your budget and your needs. He or she may also:
- Write up your purchase offer and present it to the seller or seller’s real estate professional
- Guide you through negotiations with the seller and accompany you to the closing
- Work with your lender to get them information they need about the home you’ve contracted to purchase
- Help you understand the market you’re looking in and provide comparable home values
- Recommend home inspectors and title companies
Seller’s real estate professional
Sometimes also referred to as the listing agent, the seller’s real estate professional will work with your agent on the offers, negotiations and Glossary Term: closing
of the loan.
The underwriter decides whether or not their lending organization will approve your application for a mortgage by reviewing the information provided in your loan application, supporting documentation, home appraisal and title to ensure the lender’s approval criteria is met. Your mortgage loan officer will typically communicate with the underwriter on your behalf. It is unlikely you will be asked to contact the underwriter directly.
While a home inspection is usually not required for a home purchase, it is recommended to help protect yourself from potential problems not visible to the untrained eye. A home inspector will look for things like roofing issues, plumbing and electrical problems and signs of foundation problems. If the inspector finds significant issues, you might choose to renegotiate the sales price or ask the seller to complete repairs before closing.
Your real estate agent may recommend a home inspector to you or you can find one on your own, but you will hire and pay for the inspector yourself. The 2 largest home inspectors’ professional associations are the American Society of Home Inspectors (ASHI) and the National Association of Home Inspectors (NAHI). Keep in mind that you want to be sure your inspector is fully licensed and in good standing.
The appraiser provides a professional estimate of the fair market value of your property, as required by your lender. To do this, the appraiser will inspect the property and review comparable sales information for similar properties. Your lender will hire the appraiser, but you will pay the cost of the appraisal.
The title company researches your property’s official paperwork, such as the deed of ownership and other government records. Based on the results, they will create a Title Report. This report provides a history of the property and its ownership. It will also identify any liens, unpaid debts attempting to be collected against the property, defects or encumbrances on the title. The purpose of the report is to examine the title and clear any liens or claims on the property so that you as the new buyer will receive clear and marketable title to your new property.
If you are purchasing a home, your title company will often manage your escrow account, as the title is being transferred from the seller to you. When your mortgage closes and you take possession of your new home’s title, the signing sometimes occurs at the title company’s office.
Your lender will recommend a title company to you, but you are always free to choose your own title company.
While a mortgage loan officer represents a specific lender, a mortgage broker does not. Brokers do not lend money directly. Instead, they work to match borrowers with lenders offering loan programs that best suits the borrower’s needs. Mortgage brokers earn a fee for their services in the form of a commission from the lender. If you work with a broker, be sure to ask for details on fees and commissions and who is ultimately responsible for paying them.