Notice of Intent to Proceed

Larisa plans to buy a condo in Ukrainian Village. She stopped by her bank to get pre-qualified for a mortgage. A week later she made an offer, the seller accepted it, and they agreed to close in 30 days. Larisa doesn’t have a lot of time to get the loan she needs to buy the condo, so she dropped by the bank to officially apply for the mortgage.

After she completed her loan application, the loan officer gave Larisa the initial disclosures, including a Loan Estimate. Then the loan officer asked for a $450 check to cover the cost of the property appraisal report the bank will order before they approve Larisa for the loan.

What does "intent to proceed" mean?

Think of it as your commitment to a lender. It means you applied for a loan, maybe with a few lender. You compared Loan Estimates and decided to go with one home loan and one lender. 

Don't pay any loan fees before you choose a loan and a lender. It's illegal for a lender to collect a fee until you see their Loan Estimate and notify them that you're moving ahead with their loan offer.

What if I don't like the lender's offer?

It’s up to you to decide which lender you'll use for your mortgage. You don’t have to do anything if you decide to go somewhere else. The lender will cancel your application automatically within 30-days if you're silent.

After looking at the Loan Estimate, Larisa thought the bank’s interest rate and fees were a little high. She didn't sign the initial disclosures or write a check. Instead, Larisa told the loan officer that she’s going to shop and compare the bank’s offer with a different lender.

I like the loan and the lender, now what?

Notify the lender of your intent to proceed within 10 business days after you apply. They can change the terms, including the fees if you take any longer.

After you commit to the lender, they'll start working on your loan. Expect to provide documents to verify your employment, income, and bank account balances. You'll also pay some of the fees listed on their Loan Estimate. Since you told the lender that you'll take their loan offer, you're on the hook for non-refundable third-party fees like the appraisal report.

Later that day Larisa found a better deal at newcastle.loans where she applied online and got approved in about 15 minutes. She reviewed and e-signed the initial disclosures (including a copy of the Intent to Proceed With Application form), ordered the appraisal report, and uploaded some documents directly to the Loan Dashboard - all online within an hour.

How do I deliver my notice of intent to the lender?

Do it however you want, as long as the lender can record it. Laws require lenders to get your intent to proceed before collecting fees from you, but they don't specify how. Some lenders will accept your verbal acknowledgment. Most will ask you to sign the Intent to Proceed With Application form.

We accept either your verbal or written notice. Your loan officer will record your verbal intent to proceed. If you do your home loan online at newcastle.loans, you can use the Loan Dashboard to click-to-sign the Intent to Proceed form.

Mortgage lenders... How do I choose? 

Everything is on-track with Larisa. It’s her first time buying a home and she’s delighted. Unfortunately, not every homebuyer has a great experience. If the number on the loan documents are fuzzy, or the thought of taking out a huge mortgage is unsettling, then talk with your loan officer - and do it quickly. Remember, you're under contract to buy a home so do your best to meet the deadlines.

It might help to know that the Intent to Proceed isn’t a binding document. You can switch lenders anytime. In fact, none of the loan disclosures or the mortgage documents you sign are binding until you get to the closing.

If you’re unsure about the loan officer or the lender, ask your real estate agent to recommend someone he or she trusts. Consider the lender’s experience, customer service, and reputation. Check for social proof, starting with Google and Facebook reviews.

Reach out to me or one of our home loan experts at NewCastle. We’re here to help.

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• Jim Quist, president (lic#150600), NewCastle Home Loans (lic. info)
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