The Loan Process

The Loan Process

Considering all of the variables, loan  types and lending choices consumers have today, the loan process can become complicated and overwhelming. Here we've provided a brief overview of this process so you can better understand what goes into taking out a loan for a home purchase or refinancing a mortgage. If you have any questions, we'd be more than happy to help you out.

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Pre-Qualification

This portion of the loan process takes place before you actually submit an application for a loan. During this time, we'll take different financial information into account, including you income and debts. With a better understanding of your finances, we'll be able to help you better understand how much you can afford to borrow, as well as what programs you may qualify for.

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Application

Once you've found a property you'd like to purchase or decide that you would like to refinance your current mortgage, the next step is filling out an application. Depending on the type of loan you pursue, you'll submit all required paperwork and discuss the fees and down payments associated with it. Additionally, within three days you'll receive both a Truth-In-Lending Disclosure (TIL) and Good Faith Estimate (GFE).

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Estimated Loan Processing

Once the application has been submitted, the lender takes over. During this time, depending on the desired loan program and lender preference, the application is likely submitted to an automated underwriting system. However, the lender may choose to underwrite the loan package by hand.

Pertinent financial information and history is taken into consideration during this time, including employment proof, income, debt, payment history and more. If any discrepancies or inconsistencies are discovered, the lender's processor may request that the borrow provide a written explanation. In addition to examining the application package, the lender also takes this time to survey and appraise the property that will be purchased.

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Underwriting

Following processing, the lender's underwriter examines everything provided in the loan application package to ensure that all information meets the standards determined by the lender and any relevant programs. If there are any problems or more information is required, the loan goes into "suspense," during which time those errors will be corrected.

Once the underwriter approves the loan application, a conditional commitment to lend is issued by the lender. At this time, title insurance is requested, and all of the conditions for the commitment to lend are discussed and fulfilled. Finally, a closing time is then scheduled.

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Closing

This is the last step of the loan process. Once all conditions set by the lender have been met, a full approval is issued by the lender. At this time, the lender will provide funds through a cashier's check, transfer the funds or wire the money. After that, it becomes the closing agent's job to distribute these funds to all necessary parties to meet all agreements previously made. Additionally, it's at this point that the property title is transferred to the new owner.

After all of this occurs, the loan process reaches completion. Depending on the state you live in, small aspects of the process may vary. For instance, closing can take place at various locations. If you'd like to learn more, please contact us for a more thorough explanation of the entire process and how we can help you.

Many things are considered when you apply for a loan. Visit this page to gain a better understand of what you'll likely need to provide.

Whether you're looking to buy, refinance or consolidate, the amount of options available to consumers today is broad. Learn more here.

From improving your credit score to getting the best price on your new home, you can take advantage of the financial information we offer on our blog.