Answer:

Your mortgage company will begin the work of verifying all the information you've provided. This process can take anywhere from one to six weeks, depending on the type of mortgage you choose, whether you're buying a home outside your local community, or a host of other factors.

Within three business days after your application, the mortgage company must give you an estimate of your closing costs. You'll also get a statement that shows your estimated monthly payment, the cost of your finance charges, and other facts about your mortgage.

For many home buyers, this waiting period can be nerve-wracking. So stay in touch with your mortgage company, be prepared to answer any questions that might come up -- and remember that mortgage companies are in the business of making loans, not denying them.

Some home buyers find the closing process to be one of the most intimidating aspects of buying a home because it's so unfamiliar. Ask your mortgage company what to expect at your closing.

Answer:

Be sure to respond promptly to requests for information while processing is taking place.

Be prepared to provide the following typical items:

1. The final purchase contract for the house (if applicable).
2. Pay stubs for each applicant, showing earnings for the last 30 days and year-to-date earnings. (These must be electronic or typed originals that identify the employer and employee's name.)
3. Last year's W2 and 1099 for each applicant. If you're self-employed, the mortgage company may require your personal and business tax returns for the previous two years and your company's year-to-date Profit and Loss statement.
4. Account numbers for all bank accounts, along with account statements for the past two months.
5. Information about debts, including loan and credit card account numbers and the names of your creditors.
6. Evidence of your mortgage or rental payments, such as canceled checks.
7. An irrevocable gift letter if you are receiving a monetary gift from a relative.

Answer:

Mortgage escrow accounts are special accounts set up in which money is held to pay for property taxes, fire and hazard insurance premiums, mortgage insurance premiums, and other escrow items. Escrow accounts ensure that these items are paid in a timely fashion. They are a guarantee that there is always enough money to pay these bills when they are due so that the homeowner avoids the risk of lapsed insurance coverage or delinquent taxes.

Guarantee that bills are paid on time. Homeowners do not have to worry about coming up with several large, lump sum payments, each with different due dates, throughout the year.

Unexpected increases are taken care of. It is the responsibility of the mortgage company to allow for possible increases in tax or insurance premiums.

Mortgage companies typically cover shortages when tax/insurance payments increase. It is very common for mortgage companies to pay taxes and insurance premiums when they are due even though all the money for these bills has not yet been collected from the homeowner.

Mortgages have lower rates and downpayments because of escrows. Escrows protect the interest of investors of home mortgage loans by making them more attractive and secure as investments.

Local governments save money. Escrow accounts also benefit local governments by providing a more efficient, less expensive means of tax collection.