How Does The
Loan Process Work - The very first step in the loan process is to
get pre-qualified. This is very easy to do and can be done from the
comfort of your own home. In the pre-qulification your mortgage broker
will pull credit and ask questions pertaining to your income and mortgage/rental
history. With this information the mortgage broker will be able to
give you an idea of the programs that might be available for your
situation and credit rating.
After deciding on the loan program that's right for you, complete
the Uniform Residential Loan Application with the help of your loan
officer. To complete the loan package, you will be asked to sign
all the necessary federal and state disclosure forms, and to supply
all the income and asset supporting documents, such as pay-stubs
and bank statements, if they pertain to your chosen loan type.
Once you have signed all of the required documents and provided
the necessary income & asset documentation(if needed) your mortgage
broker will submit this info to the loan underwriter. At this time
an appraisal may be done on the property being financed.
While the bank underwriter examines the loan application package,
your mortgage broker would order title search on the subject home,
if this has not already been done at an earlier stage. The title
search process typically takes several days. When the title abstract
becomes available, your mortgage broker reviews it to ensure the
property is free of title defects and unexpected liens, then forwards
the title report to the lending bank's closing agent. In states
where the title agent is also the closing agent, this step is eliminated.
With a clean title report, the title company issues a title insurance
policy at settlement.
Once the underwriter has looked at all of the paperwork sent in
with the initial package, he or she will issue what is called a
conditional approval. The loan officer or loan processor will contact
the borrower, borrowers employer or bank to acquire any additional
documentation requested by the underwriter. This paperwork will
then be sent back to the underwriter for him or her to sign off
on the conditions.
It usually takes a lender between 1-6 weeks to complete the evaluation
of your application. It's not unusual for the mortgage lender to
ask for more information once the application has been submitted.
The sooner you can provide the information, the faster your application
will be processed. Once all the information has been verified, the
lender will call you to let you know the outcome of your application.
If the loan is approved, a closing date is set up and the lender
will review the closing process with you. And after closing, you'll
be able to move into your new home.
Some loans will take longer than others to complete. The key is
to be patient and let your mortgage professional handle the process.
The know what to do and what to say to get the loan to fund.
