3 Things You Can’t Afford to Ignore During the Mortgage Process

A mortgage loan can turn the dream of homeownership into a reality. Completing a mortgage loan application, gaining loan approval, and closing on the loan are necessary steps before unlocking the door to your new home. But, the mortgage process is about much more than meeting these critical milestones.

Here are three things first-time homebuyers can’t afford to ignore during the mortgage loan process.

Mortgage Phishing Scams

It’s estimated that businesses and consumers lost over $1 billion in 2018 to fraudsters who successfully redirected wire transfer payments. Real estate transactions are not immune to this scam. Here’s how it works. Shortly before closing, scammers email or text homebuyers, posing as a real estate or settlement agent, with last-minute changes as to how the closing funds will be processed. The communication includes revised instructions to wire money to a special account not previously discussed. Since the funds are sent electronically to an incorrect account, they are challenging to recover.

Apply these tips to avoid becoming the next mortgage phishing scam victim:

• Obtain the direct contact information of the trusted professionals involved in the purchase of your new home. Write down their name, email address, and contact numbers during an in-person meeting or ask for a business card.
• Never rely on an email signature line to confirm identity. Since scammers are masters at replicating emails to look like they originated from a trusted source, avoid clicking on hyperlinks or downloading attachments until after the sender has been verified using the contact information you have on record.
• Before wiring any money, speak with a live person regarding the closing process and confirm wiring instructions. This can occur in-person or by phone. It’s fair to request the use of a code name to verify the caller’s identity when speaking by phone. Never rely solely on email to confirm wiring instructions.

If something doesn’t seem right, contact the bank or wire transfer company immediately.

Closing Disclosures

Approximately three business days before closing, documents should be received from your lender detailing the mortgage amount, interest rate, terms, payment due dates, and address where monthly mortgage payments should be sent. This information appears on a Promissory Note along with other critical loan details. Read these documents carefully to ensure you understand your rights and obligations related to the loan. Additional forms may be included with Closing Disclosures such as the:

• Deed of Trust which outlines occupancy requirements, conditions that can lead to loan default, and other borrower responsibilities;
• Initial Escrow Disclosure which details how mortgage payments are applied to escrow; and
• Right to Cancel Form.

Compare the dollar amounts and terms to the Loan Estimate you received from your lender. Ask questions about any information not understood.

Requests for Additional Information

It’s normal for your mortgage advisor to request information related to your credit, income, and employment history as you navigate the mortgage process. This information may be asked for more than once since it will likely need to be re-confirmed shortly before closing. Be prepared to provide additional documentation, as necessary. Always confirm how soon the requested documents should be submitted since a slow reply can cause unnecessary delays.

Potential homeowners should keep records of all communication with their real estate agent, lender, title company, and other real estate professionals assisting with the mortgage process.

Ready to take the next step towards homeownership? Let Ephrata National Bank partner with you. We offer a variety of mortgage loans for first-time homebuyers. Email or call us today at 877.773.6605. Our mortgage experts are available to discuss your options.