Mortgage Origination Process Overview
The mortgage origination phase of the mortgage lending process involves several steps:
Loan Application: The borrower submits a loan application, which includes information about their income, assets, debts, and credit history.
Pre-Approval: The lender reviews the borrower's application and credit report to determine their ability to repay the loan. If the borrower meets the lender's criteria, the lender will issue a pre-approval letter indicating the maximum loan amount for which the borrower is pre-approved.
Executed Contract: A legally binding agreement between a buyer and seller that outlines the terms and conditions of a property transaction. Once both parties have signed the contract, it becomes binding and enforceable.
Loan Estimate: The lender provides the borrower with a Loan Estimate, which is a document that outlines the estimated loan terms, interest rate, monthly payment, closing costs, and other details related to the loan.
The mortgage origination phase helps ensure that the borrower is qualified for the loan and that the lender is comfortable with the risk associated with the loan. This phase is also an opportunity for the borrower to shop around for the best loan terms and interest rates.