Why is it important to know what each role does during the mortgage process?
Getting a mortgage is a pretty big deal. A house is a very large expense and with government regulations, there are a lot of things that must be accounted for and verified in order to get the loan through to funding. Throughout the mortgage process, you’ll hear a lot of different foreign terms and titles. You’ll better understand what stage your loan is in if you are aware of these positions. Who are the people behind those titles? What are their roles in getting you your home? Keep reading to find out!
As the buyer in the mortgage process, your job is to find the right home and decide how you are going to pay for it based on your intentions for the purchase. While you will have people advising you throughout the transaction, it is important that you know what you want out of the purchase. It’s also important to understand that you will need a lot of documents to give to your lender during the process, the quicker that you are able to obtain these things the faster this process will be!
Some things you’ll want to consider:
- What area you want to live in
- What monthly payment you’re comfortable with
- How long you plan on residing in the home you’re purchasing
- You’re wishlist for things you want out of the home
Its also important to think about any major changes you have coming up such as a job change, or any large purchases that could change your credit score during the loan process. This can lead to delays so it’s important to keep your lender in the loop with anything you think could change your income or credit score.
The seller could have different reasons for why they are selling the house. Depending on these reasons, could influence their willingness to negotiate the price. If they owe a large amount on their current mortgage compared to what the home is worth, then they could be unable to negotiate the price. Even though you won’t know the situation that the seller is in, it’s important to understand there could be different things factoring in their unwillingness to budge on price.
The Seller's Agent
The Selling Agent is the Buyers’s Realtor. Their main job in the mortgage process is to help you find a home that fits your needs and wants. They need to be a strong negotiator in order for you to get the best price possible on your new home.
The Selling Agent should be sending you and showing you listings that match the criteria you have laid out for your purchase. They should be knowledgeable about the area and it’s market conditions.
The Selling Agent should be able to tell the actual value of a prospective home as opposed to just the listed value of the homes you are looking at.
During the process of your purchase, your Realtor should help make sure the deal is on track in terms of getting closed on time by communicating with the lender, title company, and escrow officer. They will help schedule inspections and other items that need to be done during the transaction.
The Listing Agent is the Realtor that represents the Seller. They are hired by the seller to list the property and market it to potential buyers.
Their main priority in the mortgage process is to sell the house at the best price for the Seller. They will help the Seller make calculated decisions on what offers to accept as well as how to price their home based on comps in the area.
They will work with your (the buyers) Realtor on all negotiations including price and repairs that may be needed after the home inspection.
The main goal of the Loan Officer in the mortgage process is to make sure that you get the funding needed to buy your home. The Loan Officer is the first person that you should contact when deciding to buy a home. They will help you go through your budget and decide how much you can afford, what loan programs you qualify for, and if there are any additional government programs that could help you.
The Loan Officer will get you pre-approved for a loan which will help give you a leg up on the competition when dealing with competing offers. The Sellers will see that you have already consulted and been pre-approved which gives you a better chance at getting your loan closed.
Once you’ve made an offer and its been accepted, your Loan Officer will walk you through each step of the process to getting your home funded.
Many lenders use Loan Processors to help set up the file for underwriting. They will work with your Loan Officer during the mortgage process to make sure all of the information is accurate and verified.
Depending on how your lender’s office is run they will order appraisals, all the necessary verification and any other items that need to be done prior to the loan being underwritten.
The Underwriter’s job is to make sure that your loan file meets the guidelines of your chosen loan program as well as the guidelines of the investor who will be funding your loan.
Underwriters have the final say in terms of loan approval. Your Loan Officer and Loan Processor will work with the underwriter during the mortgage process to make sure that your loan is able to be approved.
The Home Inspector is hired by you during the mortgage process to help make sure that the condition of the property is satisfactory and that there isn’t anything the sellers or listing agent are hiding during the sale of their transaction.
They will inspect the house from top to bottom to make sure that you’re buying a home without any significant issues.
Once the home is inspected you will be able to make an informed final decision on purchasing the home.
In almost all cases they will suggest items needed for repair. At that point, you will be able to renegotiate with the sellers to get those items fixed.
The Appraiser is hired by the lender during the mortgage process to make sure the home meets value and condition requirements that are laid out by the purchase contract and loan program guidelines.
Some loan programs have stricter guidelines when it comes to the condition of the property.
The listing agent should be aware of these conditions and only offer sellers the types of financing that will meet the appraisal requirements. Otherwise the sellers or even you the buyer will be fixing the problem areas in order for the loan to close.
The Title Company will make sure that the property has a clear title. This means that there are no judgments or liens against it. In layman’s terms, it means that it verifies that the seller actually owns the property.
They will also ensure that there are no other legal or financial issues with the property.
The Title Company will provide you a preliminary title report that you as the buyer are allowed to view and see all easements and other recorded documents that affect the property.
Escrow Officer (Closer)
The Escrow Officer will help you sign your final documents. They will work with your lender to fund and record your loan. The Escrow Officer is a neutral party that facilitates the recording and funding while not representing either party in the transaction.