Submit Full Mortgage Application
Once you sign your Purchase and Sale Agreement you should be ready to submit your mortgage application. Your loan officer may begin to collect documentation before then, but you cannot officially submit your full application until you have a signed P&S. To prepare for submitting your full mortgage application, review this Mortgage Application Checklist.
You may receive a Good Faith Estimate (GFE) and/or a Truth in Lending Statement (TIL) from you loan officer while you are shopping for a mortgage. If not, when you apply for a mortgage your loan officer is obligated to issue you an official GFE and TIL no later than three days after your application date. If you do not receive this documentation in the allotted time, contact the Consumer Financial Protection Bureau.
As part of your application your loan officer will ask you for several pieces of documentation. You should have this in order leading up to the day you sign your Purchase and Sale Agreement, so your application can be submitted no later than the day after. Your P&S will give you about 30 days from the time you sign the document to receive your commitment letter from your lender. The earlier the loan application is submitted, the more time you have to meet that finance date. When you submit your application, it is sent to an underwriter who makes the decision on whether you loan is approved or denied. While you wait for the decision, your loan officer will likely be asking you for updated versions of the documentation you submitted with the application. This can be a stressful point in the process, but make sure to get your loan officer everything they ask for in a timely fashion in order for the underwriting process to go as smoothly as possible.
In addition to your application, the property you are purchasing must get an appraisal ordered by the underwriter that satisfies the lender. This means that the appraised value must come in at or above your agreed-upon purchase price. If the appraised value is lower than your purchase price, you will have to try to renegotiate the price with the seller. If the seller is not willing to renegotiate you have the option of paying the difference between the appraised value and the purchase price as part of a larger down payment. You also have the option is to terminate the deal if you are still covered by your Mortgage Contingency Clause. This is why it is crucial you do not let your finance date lapse.