The mortgage process generally consists of six steps:

Application
Preliminary Approval
Loan Processing
Appraisal
Final Approval
Closing

Application
The first step is simple—you need to apply. If you’re not quite ready to apply or need more information, review this Web site or contact us for more information. To process your application through any program, we will need basic financial information about you. Your FairHomes representative will be able to help you through this process.

Preliminary Approval
Based on the basic information you give us, we will let you know the estimated loan amount you are pre-qualified for and help you determine the best possible financing and mortgage product for your situation. Your FairHomes representative will be able to explain all the details to you at this point and present you with your options.

Loan Processing
In order to purchase the home or property you have selected, additional forms must be completed to process your loan. Following is a summary of the forms:

• Good Faith Estimate of Settlement Costs
  This details the loan amount and all related charges and fees.
  
  
• Truth in Lending Disclosure
  This lets you know what your estimated annual percentage rate of interest (APR) will be and any other program features that apply.
  
  
• Borrowers Certification
  When you sign this, you authorize that all the information you provided is correct to the best of your knowledge. It also allows us to finalize the process by contacting your landlord, employer, mortgage company, and others and obtaining a credit report to verify your credit history.

Appraisal
Next, we will have the home appraised to certify the fair market value and will complete a second appraisal, if necessary. During this process, the appraiser will visit the property and compare it’s features, floor plan, lot and other features against similar properties in the area. (Buyer will receive a copy of the appraisal(s) at closing.) Because the homes are marketed below the appraisal value, we will share the difference with you in an effort to exceed the needs of our clients.

We also obtain a title commitment at this time. This will tell us the legal details of the property including liens against it (i.e. another loan). You will be entitled to obtain owners coverage for title insurance at your closing.

Final Approval
During final approval, an underwriter looks over all the paperwork and loan details and decides whether or not it supports the preliminary approval issued earlier (step 2). A few key items reviewed include:

The Property: In this case, they review the appraisal report.
Total Debt Ratio: This is the ratio between all your sources of income against all your debts.
Cash Reserves: After your loan settlement costs are paid, this is the amount of money left over in your bank account. (You’ll still need cash to live on until the next paycheck comes.)
Credit History: Looking at your past debts and payment history is a measure of how likely and able you will be to repay your loan.
Employment History: This isn’t only how much you make, but how stable your income is.

Closing
You’re finally here. This is the “mountain of paperwork” you’ve heard about. But don’t worry — it’s the closing agent’s job to explain everything to you so you know what you are signing. If you would prefer, your FairHomes representative can arrange to be there as well. At this time, you will be expected to take care of the closing costs and the balance of your down payment (if applicable). Once you complete this step, you’ll be a homeowner!