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Step 11: Mortgage Commitment Unless you have placed a cash offer, you have probably agreed to secure a mortgage equal or less than the terms you have agreed to in the contract by a given date. Your next step after resolving A/I issues then, is to submit an mortgage application right away so that your mortgage broker can process the application and receive a committment letter from the lender in time to meet your contracted deadline. If you don't apply for the mortgage in a timely manner, you may be in default of the contract!
Depending on the mortgage product you are applying for, you may need to submit documents, fill out forms and provide proof of assets, liabilities and income to be approved for the mortgage. Once all the information is in, the mortgage will move from Processing to Underwriting. At this point, an appraisal will be scheduled (usually through the listing agent). The length of time it takes your application to get through the process will depend on how busy your mortgage broker and lender are. I make every effort to contact your mortgage officer before writing an offer to ensure that the timeframe we commit to is reasonable.
Once we have a committment letter from the lender, your attorney will forward proof that you have fulfilled the mortgage contingency to the sellers' attorney.
Sometimes, if the lender is very busy, or is otherwise unable to schedule a timely appraisal, your lawyer may request an extension of the mortgage contingency from the sellers. Typically, this is not a problem, although the sellers are not required to agree--which is yet another reason to contract into a reasonable timeframe and work diligently toward meeting it.
NOTE: A committment to lend is NOT a mortgage. You do not start accruing interest charges until the date of closing.
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