How Do I Complete My Mortgage Once I’ve Had My Offer Accepted?

Once your purchase offer is accepted, you will need to finalize your mortgage approval before the close date.  This can sometime be a hectic period as you cross every 't' and dot every 'i' with your lender in a very short period.  Your mortgage banker should be in regular contact to confirm what he or she needs from you, and to keep you updated as to the progress on their end.  It is important that you are very clear with your mortgage banker as to your closing deadline, and if you have any times during the escrow period where you'll be traveling or otherwise unavailable.


There are two parts to the mortgage approval: underwriting you as a borrower, and underwriting the home as collateral.  You (and your banker or broker) need to finalize the borrower underwriting, where your banker and a third-party appraisal company will handle the valuation of the home.  There are some other conditions that need to be met before the mortgage is funded, such as proving you have purchased the required title insurance and homeowners' insurance.


Borrower underwriting requires demonstrating that your income can comfortably afford the monthly mortgage payments (as per the bank's policy), taking into consideration other debt obligations that you may have.  The mortgage banker will want to confirm your income from your most recent pay stubs and tax returns, and will want proof of assets that you own (bank statements and brokerage statements).  You may also need to provide proof of any large cash inflows and outflows over the last 12 months (annual bonuses, inheritances, gifts, etc.).  There can sometimes be some back-and-forth between you and the bank to ensure the bank's underwriters have the correct documents.


Underwriting your home as collateral involves a third-party assessing the 'fair market value' of your property.  Banks' lending policies specify maximum loan-to-value ratios that their mortgages must adhere to.  To determine the value of the home, a third-party appraiser will come and take measurements and assess the condition of your home, and look at other recent comparable sales in the neighborhood, before giving their independent value of the home.  We've found that appraisers generally come up with a valuation that is almost-exactly what you paid!


Assuming that your borrower underwriting and the home's valuation come out as anticipated, your mortgage will be ready to fund by your close date.







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Buyers' Guide