Here's what to expect
Getting a mortgage doesn’t have to be overwhelming. At Embrace, we’re here to make the process as stress-free as possible. Buying a new home should be an exciting time, and we want to make sure you enjoy every second.
Whether you’ve already found your dream home, are actively shopping, or you’re just starting to look, you probably have some questions about how to get the financing you need. Read through the steps below or give us a call and let an Embrace mortgage specialist walk you through everything you need to know.
Pre-Qualification. The first step when you’re unsure if you qualify or wondering how much you can afford is to get pre-qualified. With a pre-qualification, you’ll have an idea of how much you’d be able to spend on your new home, and it can help you decide if it’s the right time to be house-hunting.
Embrace is the first mortgage lender to offer pre-qualification entirely through text message, so if you want to get pre-qualified in minutes right from your phone, text PREQUALME to 22722. There’s no obligation or cost to you, and no impact to your credit score.
To get a general idea about how much house you can afford, try one of our handy mortgage calculators.
Pre-Approval. If you’re confident you would qualify, or want to kick things off more seriously, you can skip pre-qualification and jump right to a pre-approval. While both are similar in many ways and the terms get used interchangeably by some lenders, a pre-approval usually means the lender will check your credit to verify financial information about your income, assets, and debts. A pre-approval letter can help your offer stand out from others, as it shows the seller and their real estate agent that you’re a serious buyer who’ll likely be able to follow through on your offer.
Application & Loan Estimate. Once you’ve settled on your dream home, you can go ahead and move forward with an official mortgage application. Your Embrace mortgage specialist will help you fill out all the necessary information about you and your financial history, and ask questions about your potential mortgage, such as if you’ll have a co-borrower. At Embrace, we work hard to take all the confusion out of the application and will make sure you’re putting yourself in the best position possible at every stage. We’ve even developed a simple online application to walk you through the entire process at your own pace!
After completing the application, you’ll receive a loan estimate and several other documents to review. The loan estimate, or LE, provides you with all the details and costs associated with the loan you’re considering, including the interest rate, monthly payment, estimates of taxes and insurance, and the closing costs of the loan. The form uses clear language – not legal jargon – to help you understand every little detail of the mortgage you’ve applied for, and all lenders are required by law to use the same standardized form.
Processing. If you decide to move forward after you have the loan estimate in hand, the next step is to work with your mortgage specialist during processing to review information and organize all the necessary documents into a loan file. At this point, we’ll double-check everything to make sure you have the best chance of being approved for the loan by verifying your income, assets, and employment. You’ll probably also discuss a few other things that need to happen before underwriting, including the property inspection, appraisal, and title search.
Underwriting. What’s underwriting? It’s how we assess risk and make sure you meet the requirements of the loan you’re applying for.
Your mortgage specialist will work with you to gather all necessary documents, and the underwriter will review the information to ensure all loan guidelines have been satisfied. Occasionally, the underwriter may approve your loan “with conditions.” Your mortgage specialist will work with you to clear any conditions as quickly as possible to meet the loan requirements.
And because we do all of our underwriting in-house, we are able to efficiently process your loan. In fact, once all your documentation is received, we strive to deliver an underwriting decision on your purchase loan within 24 hrs, so you’re not waiting around for several days or weeks.
Approval/Closing. Once you’ve met all of underwriting’s requirements and gotten their green light, your mortgage application is approved! You’ll receive a commitment letter, which describes all the nitty-gritty details about your loan: the loan program, amount, term, interest rate, conditions of approval, and disclosures. The closing disclosure will explain all the various fees and costs of services associated with the closing of your loan and who’s responsible for paying them.
At the “closing,” you should be prepared to bring a check to cover your down payment and any remaining costs laid out in your closing disclosure. The seller will sign documents to transfer ownership of the property. You’ll sign documents related to the settlement of the transaction and your mortgage, including the mortgage note itself. Depending on where you live and other factors, you may be joined by your co-borrower, the seller, a closing agent, attorneys, a title agent, your mortgage lender, and the real estate agents. After all the signatures are in place, the funds can be distributed to the title company, who’ll officially file the transfer of the title in your name with the county recorder.
The last step? You get your keys! And we look forward to celebrating with you.
30-Year Fixed-Rate Refinance Mortgage Example:
The payment on a $225,000 30-year fixed-rate cash out refinance loan at 3.250% with a 70% loan-to-value (LTV) is $979.21 with 2 points due at closing. The Annual Percentage Rate (APR) is 3.520%. This assumes a FICO score of at least 690. Payment does not include taxes and insurance premiums, which will result in a higher monthly payment. Interest rates and annual percentage rates (APRs) are based on current market rates and are subject to change without notice. Rates offered may be subject to pricing add-ons related to property type, loan amount, LTV, credit score, and other variables. Mortgage insurance may be required for LTV >80%. If mortgage insurance is required, the mortgage insurance may increase the APR and the monthly payment. Stated rate may change or not be available at the time of loan commitment or lock-in.
30-Year Fixed-Rate Purchase Mortgage Example:
The payment on a $225,000 30-year fixed-rate purchase loan at 3.125% with a 70% loan-to-value (LTV) is $963.84 with 2 points due at closing. The Annual Percentage Rate (APR) is 3.390%. This assumes a FICO score of at least 710. Payment does not include taxes and insurance premiums, which will result in a higher monthly payment. Interest rates and annual percentage rates (APRs) are based on current market rates and are subject to change without notice. Rates offered may be subject to pricing add-ons related to property type, loan amount, LTV, credit score, and other variables. Mortgage insurance may be required for LTV >80%. If mortgage insurance is required, the mortgage insurance may increase the APR and the monthly payment. Stated rate may change or not be available at the time of loan commitment or lock-in.