You've applied for a loan with Freedom Mortgage to buy or refinance a house. What happens next? Here's what you can expect from the mortgage process as we review your application:
E-Consent, Initial Disclosures, and Intent to Proceed
Once you submit your application, we will send you an email with a login link to review and sign documents. These documents are known as your Initial Disclosures Documents and include:
E-consent. E-Consent means you would like to receive and sign your documents electronically. (Although it is a quicker option than mailing, you are not required to receive documents or disclosures electronically.) If we don't receive electronic consent within 3 days of your application submission, we will mail copies of your Initial Disclosure Documents to you. You have 10 days to review and sign these disclosures electronically or by paper copies. If we don't receive your signed documents, your application will be incomplete and will no longer be processed.
Initial Disclosure Documents. Your Initial Disclosure Documents include your Loan Estimate, which shows preliminary details including your loan amount, interest rate, projected monthly payments, closing costs, and other important disclosures. It's important to note that these are preliminary estimates only based on the best information we have at the time. A closing agent will contact you later in the process to review your final loan estimate, answer your questions, and schedule your closing with a date, time, and location of your choice.
Intent to Proceed. To move your application into underwriting review, we need your Intent to Proceed. Intent to Proceed gives us the okay to take your application to the next step but does not commit you to accepting the loan.
Underwriting your mortgage application
Once we have your initial approvals, our underwriters will examine your application. Loan criteria varies based on the loan type (such as conventional or VA) and whether you are buying or refinancing a house. These will determine credit, debt, income, asset, and loan-to-value requirements. We will also calculate a debt-to-income ratio (DTI) based on your monthly expenses and income. We use DTI to help us estimate your ability to make your mortgage payments in addition to your other monthly expenses.
When you are buying a house, we will most likely send an appraiser to estimate the home's value and ensure the sale price is consistent with the market value of other homes in the neighborhood. For a refinance, an appraisal will be dependent on the requirements of the loan type.
During our review, we may request additional documents from you. It's important that you respond to these requests quickly so we can keep your loan moving and close as early as possible. Learn more about mortgage underwriting.
About title searches
When you are buying home, we will perform a title search. A title search examines the history of the home's ownership. It verifies the seller is the legal owner of the house you are buying. And it makes sure there are no liens against the property, which are legal claims on the house that result from an unpaid debt.
The title search helps make sure no one else can claim to be the legal owner of the house after you buy it. Checking for liens helps make sure there are no debts attached to the house you might have to pay. For example, local governments might file a lien against a house when the owner does not pay property taxes. If you buy a house with a tax lien against it and it is not cleared before you take title, you can become responsible for paying the debt. We require all liens on a property be resolved before we give you a loan. We perform title searches when you are refinancing a house, too. Learn more about property title searches.
About home inspections
Many if not most homebuyers request an inspection of the home they want to buy. A home inspection is different than a home appraisal. A home inspection identifies problems with the house that need to be addressed before the sale closes. These problems can include structural problems, issues with the electrical, plumbing, or heating and cooling systems, a leaky roof or termite damage. Some government-backed mortgages may require a home inspection as well. Learn more about home inspections.
Approving your mortgage application
Once underwriting has completed the review of your credit, debt, income, and assets and they meet the guidelines, your loan is approved! We'll send you an email to let you know that your loan is approved. The next steps are reviewing your Closing Disclosures and setting up your closing date.
Closing Disclosures
After your loan is approved, we send you Closing Disclosures. These documents show the final details of your mortgage, including the amount of money you are borrowing, your interest rate, the amount of your closing costs, and your estimated monthly payment. We will contact you to do a pre-closing review. Our agent will review the closing documents with you. You will need to sign all disclosure documents, either through our online system or by paper copies we send in the mail.
Scheduling a closing date
We'll contact you so you can choose a closing date, time, and location that is convenient for you. We'll review the steps to closing your mortgage, making sure you know what you need to bring and what you need to do at closing.
Closing on your mortgage
At closing, you'll be asked to sign your mortgage documents, make a down payment if you are buying a house, and pay any closing costs. Closing costs can include property tax payments and homeowners insurance premiums that may be due soon after closing. They can also include money needed to establish your escrow account.
The legal requirements for closings vary by state. Some states require spouses or witnesses to attend closing. An attorney may have to conduct your closing depending on the state where you live too. Check out our other practical tips on mortgage closings.
When you are buying a house, you become the legal owner of the home and the seller gets their money when the mortgage closes. When you are refinancing, you pay off your old mortgage and replace it with a new one at closing.
Paying your mortgage service company
After closing, you will make your mortgage payments throughout the life of the loan to your mortgage service company. (This may be the same company that gave you the mortgage or it may be a different company.) Each month, you will receive a statement from your servicer that shows your principal, interest, and escrow payments as well as your loan balance and any changes to your payment. Depending on when you close your loan, your first payment may not be due for 30 to 60 days.
If Freedom Mortgage is your mortgage servicer, you can see your loan details on paper statements or through your online account. You can also call our Customer Service representatives at 855-690-5900 with questions. We will be happy to help!