Mortgage Checklist & Guide: DuPage County, IL
This guide is intended for those seeking to navigate the mortgage process in DuPage County, Illinois, with clarity and confidence. This checklist will serve as your comprehensive roadmap from pre-approval to closing day.
Note: It’s important to go to the lender and get PreApproved for a mortgage first, before going to a real estate agent.
Phase 1: Pre-Approval and Financial Foundation
This initial phase is critical for determining your purchasing power and preparing a strong application. it is performed by the lender after you submit your application and upload financial documents.
Financial Readiness Check
- Credit Health: Your credit report from all three major bureaus (Equifax, Experian, and TransUnion) will be run. The fee for this used to be nominal and most lenders used to just run the reports without charging. However, the credit bureau’s all have dramatically increased their fees so now the lender will usually ask for payment for the credit reports up front.
- Debt-to-Income (DTI) Ratio: The lender calculates your DTI ratio. Most lenders look for a DTI below 43%, though some may approve up to 50%. A lower DTI indicates greater financial stability.
- Income Stability: Your employment history for the last 2 years will be reviewed. You should be in the same or similar line of work during the past two years, though there are some exceptions.
Required Documents for Pre-Approval
- Personal Identification: A valid driver’s license or state ID.
- Proof of Income:
- Last 2 years’ W-2s and federal tax returns.
- Last 2-3 months’ pay stubs.
- For self-employed professionals, profit and loss statements and business tax returns for the past 2 years.
- Asset Information:
- Bank statements from checking and savings accounts for the last 2 months.
- Statements for retirement accounts (e.g., 401k, IRA) and other investment accounts.
Phase 2: Processing & Underwriting
- Loan Estimate: After this, you will receive a Loan Estimate from the lender. This standardized form details the interest rate, estimated closing costs, and monthly payments.
The Underwriting Process
- Final Document Submission: Remember, you’ve already passed the “automated underwriting.” Now the process moves to the underwriting department where a professional underwriter will review all your submitted documents to verify the information. Be prepared to provide additional details or explanations for any discrepancies as underwriters often, for clarity, will ask for a brief letter of explanation or LOE.
- Appraisal and Inspection: The lender will order a home appraisal to ensure the property’s value is consistent with the loan amount they are lending.
Phase 3: Closing and Post-Closing
After clearing the above stages, this is the final stretch of the process, where all parties work together to finalize the transaction.
Closing Day Preparation
- Final Walkthrough: Conduct a final walkthrough of the property to confirm it’s in the agreed-upon condition.
- Review the Closing Disclosure: This document, provided by your lender at least 3 business days before closing, is the final version of the Loan Estimate. It outlines all fees, credits, and the final loan terms. Compare it to your initial Loan Estimate to ensure there are no unexpected changes.
- Bring Certified Funds: You will need to provide a cashier’s check or wire transfer for your closing costs and down payment. Verify with the title company or closer how they prefer funds to be delivered. Don’t assume anything and act on your own.
DuPage County-Specific Closing Costs
- Property Taxes: Illinois property taxes are paid in arrears. In DuPage County, property tax payments are due on June 1st and September 1st. Be prepared for proration, where the seller credits you for the days they occupied the home since the last tax payment.
- Transfer Taxes: There are transfer taxes, which are charged by the state and county. Illinois charges $1.00 per $1,000 of the sale price, and DuPage County charges an additional $0.50 per $1,000. Some municipalities within the county may also have their own transfer taxes, so it’s essential to check with your real estate attorney and or title company.
After the Closing
- Recording the Deed: The title company will record your new deed and mortgage documents with the DuPage County Recorder’s Office.
- Final Payments: Set up your first mortgage payment and ensure your homeowners insurance is in place.
- Property Tax Exemptions: As a new homeowner, you may be eligible for homestead exemptions, which can lower your property tax bill. Be sure to apply with the DuPage County Supervisor of Assessments.
By following this checklist, you can approach the mortgage process in DuPage County, IL, with a strategic and informed mindset, setting the stage for a smooth and successful homeownership journey.
