It really helps when buying a home to understand “what” exactly happens, when it happens and what to expect when going through the Loan Process. We hope that our blog today will help you along the way!
This is the beginning of the home buying process, before you even start looking at houses. This process involves meeting with a loan officer, and providing information on your income, assets, debts and a potential down payment amount. The loan officer will use this information to provide you with an estimate of how much he/she thinks you could afford to pay for a monthly mortgage. This estimate is simply a helpful tool in figuring out if buying a home is a viable option, and there is no cost or commitment involved.
Similar to Pre-Qualification, Pre-Approval also takes place before you start looking at houses. The distinction between Pre-Qualifying and a Pre-Approval is that the Loan Officer utilizes the credit, income, and asset documentation you’ve provided to send your loan package
through an Automated Underwriting service. Utilizing this service and receiving approval will help the Loan Officer better determine how much you qualify for so they can provide a strong pre-approval letter to your Real
Estate Agent. This will help strengthen your buying power when making an offer on your desired home. It is important to note that an Underwriter will still make a final loan determination once your file is physically reviewed. There remains no cost or commitment in order to obtain a Pre-Approval.
The application process begins after you find the “perfect” house! Within three business days of giving the loan officer the property address, your income and credit information you will receive an initial disclosure package including a Loan Estimate which will reflect an estimate of the fees and terms of the loan being applied for.
After the initial disclosures, including the Loan Estimate, have been reviewed & signed, you have indicated your intent to proceed, and have provided all of the remaining documents from the Loan Document Checklist, your loan will be packaged by the loan officer and team for submission to the processing department. Your loan processor will review the information submitted and order the appraisal and any additional verifications necessary to put your loan in front of an underwriter. Additional information may be required.
After the appraisal has been received and the third party verifications have been received, the processing team completes their review of the file and completes the third party verifications – the loan file will be submitted into underwriting. Once your loan has been submitted to underwriting, the underwriter is responsible for reviewing all accumulated documents submitted by your loan officers’ team in order to make a credit decision. Upon underwriter review, additional documentation may still be required.
Pre-closing means all loan conditions have been satisfied. During this process the final insurance policies and loan documents are ordered, and a closing disclosure will be sent to you. Once we reach post closing your loan officer will reach out to you, the realtor and the settlement company to verify signing dates and confirm fees. The Closing Disclosure is a statement of final terms and closing costs which will require a signature. Once the Closing Disclosure is signed there will be a three-business-day waiting period before Closing.
At the closing, also known as the “settlement”, closing docs are signed and the settlement agent issues a cashier’s check, draft or wire to the selling party in exchange for the title to the property. In escrow states, doc signing and loan funding occur on separate days; in non-escrow states, signing and funding occur on the same day. This is the point at which the buyer finishes the loan process and becomes a “homeowner”.
Additionally, if you currently own a home and are in need of finances, want to take a trip, consolidate debt; then NOW is the time to look into refinancing. Or if you are elderly and need money monthly to live, then you may be ready for a Reverse Mortgage with Land Home!