What Happens During the Loan Process? (What You Want To Know Wednesdays)

What happens during the loan process?

Once you find your dream home, your agent will submit a purchase offer. If the offer is accepted the timelines start. The loan will then undergo the process for final mortgage approval. This includes appraisal, inspections, disclosures, underwriting, documents, and then finally funding!

To begin the process, a loan application must be filled out, known as the 1003. Once that information is received your Loan Officer will ask you for documentation pertinent to the approval process. The appraisal will then be ordered. Once all documentation is received the Loan Officer will submit the file to the lender.

When the lender receives your loan application/package the Disclosure department will start working on the Loan Estimate. The Loan Estimate will provide you with important information about the loan such as the estimated interest rate, monthly payment, and total closing costs for the loan. This form is specially designed to be clear and concise for everybody. You will then decide if you want to move forward with the loan.

Once Disclosures has finished disclosing the file it will move into Underwriting. The Underwriter will review the file and make sure this is the loan for you. A lender’s biggest concern is making sure you are qualified for the loan you are applying for. Additional documentation may be requested to confirm approval. It is important to not make any large transactions or open lines of credit during the approval process, as it can delay approval.

Three days before closing you will receive your Closing Disclosures. These documents explain the actual costs of the transaction as opposed to being just an estimate.

Within a few days of final loan approval the loan documents will be drawn up and completed. They will be sent to the title company, and the escrow officer will notify you when the documents are ready for final signatures. They will also tell you how much money you will have to bring to closing.

Once all parties have signed the loan documents and returned them to the lender they are checked for accuracy and, if no corrections need to be made, the check is issued to fund the loan! Once the title company receives the funding check, they record the note and deed of trust to public record at the county recorder’s office. Escrow is officially closed after this step!

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* Specific loan program availability and requirements may vary. Please get in touch with your mortgage advisor for more information.