Common questions about process, answered by Mike Swaleh.
What is underwriting?
Underwriting is the lender review that decides the file – verifying income, assets, credit and the property against program guidelines. Almost every file comes back with conditions, meaning additional documents or explanations. That is normal and is not a sign of trouble. The fastest thing you can do is return requested items quickly.
What is an appraisal and what if it comes in low?
An appraisal is an independent opinion of value ordered by the lender to make sure the loan is supported by the property. If it comes in below the contract price, the usual routes are renegotiating with the seller, covering the difference in cash, or in some cases appealing with better comparable sales. Your agent and Mike would work that one together.
What is the difference between an appraisal and an inspection?
An appraisal is for the lender and is about value. An inspection is for you and is about condition – it is generally optional but strongly advisable, because it is the only part of the process looking out for what you are actually buying. They are not substitutes for one another.
What is title insurance and do I need it?
A title search confirms clean ownership, and title insurance protects against defects, liens and claims that surface later. The lender policy protects the lender; an owner policy protects you. They are separate, and the owner policy is the one people sometimes skip and later regret.
Do I need homeowners insurance before closing?
Yes, it must be in place before closing. In parts of California, availability and cost have become a real constraint – especially in higher fire-risk areas – and it can affect your timeline as well as your payment. Start shopping it early, and tell Mike as soon as you know the property so it does not surprise you late.
What is an escrow or impound account?
It is an account your servicer uses to pay your property taxes and homeowners insurance, funded by a portion of each monthly payment. It is why your payment is larger than just principal and interest – and why it can change year to year as taxes and insurance change. The money is yours, going to your own bills.
What happens at closing?
You receive a Closing Disclosure at least three business days before signing, showing final terms and costs. At signing you go through the loan documents, funds are wired, the loan funds and the transaction records. Bring identification and be sure any funds you owe are sent by the method the escrow company specified – wire fraud is a real risk in this industry, so verify instructions by phone using a number you already have.
Mike Swaleh, Area Manager · NMLS #739145 · Fairway Independent Mortgage Corporation, NMLS Entity ID #2289
436 Lincoln Boulevard, Suite 105, Lincoln, CA 95648 · mswaleh@fairwaymc.com · Licensed in AZ, CA, CO, FL, GA, IL, KY, MO, NV, NC, OR, SC, TN, TX, WA
This information is not intended to be an indication of loan qualification, loan approval or a commitment to lend. Other limitations may apply. This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates, and programs are subject to change without prior notice. All products are subject to credit and property approval. Not all products are available in all states or for all dollar amounts. Fairway is not affiliated with any government agencies. Licensed by the Department of Financial Protection and Innovation under the California Residential Mortgage Lending Act, License No 41DBO-78367.
Equal Housing Opportunity. Verify licensing at nmlsconsumeraccess.org
