Getting The Word And Whats Next
How youll learn whether your loan is approved and
what happens next.
If your loan is approved, youll generally
be notified by a letter of commitment although if your closing
is scheduled to occur very soon after the approval is granted,
you may get a verbal commitment instead of a letter.
Your commitment letter will include the terms
of your mortgage, including the interest rate and points, and
specify how long the terms are offered. If you settle on your
loan within that time, the terms apply; if you dont, the
terms are subject to change.
In some circumstances, your commitment letter
may also include additional information:
- If the loan is eligible for government insurance
or guaranty, youll receive a written agreement from
the appropriate government authority (FHA or VA).
- If your down payment is less than 20 percent
of the total purchase price for a conventional mortgage, youll
receive an application for the required private mortgage insurance.
Generally, you must accept the commitment
letter by returning a signed copy to the lender within five
to ten days; you may also have to pay some or all the origination
fee at this time.
- Regardless of how you receive your commitment,
you should make sure you understand all the terms and conditions
completely. If you have any questions, ask your lender.
- If your loan is not approved, your lender
must notify you within 30 days from acceptance of your completed
application. This notification must also include the reason
or reasons for the decision. If your loan request has been
denied, make sure you understand why. Your lender can help
explain what steps you can take to correct the problem, so
you can reapply in the future.
The next steps...
Once youve received your loan commitment,
the next step is to close your loan and buy your home.
Congratulations and good luck...youre getting
much closer to your new home!