The Loan Process
Pre-Approval occurs before the loan process actually begins. The broker gathers information about your income and debts, and makes a financial determination about how much house you may be able to afford. At this time we will submit your application to an automated underwriting system, or have your application reviewed to see if a manual underwrite can be approved.
It’s a good idea to know how expensive a home you can afford before you start shopping for one! If you are refinancing the loan on your existing home, then the pre-approval process should help you decide whether refinancing is a good idea for you.
The application is the beginning of the loan process and either occurs after you have found a property you want to buy or have determined that you wish to refinance the loan on your existing home. You complete a mortgage application for a particular loan program and, supply all of the required documentation for processing. Various fees and down payment options are discussed at this time.
Processing your Loan
Our processors review the credit reports and documentation to verify your employment, debts, and payment histories. If there are unacceptable late payments, collections, judgments, etc., the processor requests a written explanation from you. The processor also reviews the appraisal, title and survey and checks for property issues that may affect final loan approval. The processor’s job is to put together an entire application package for the investor’s underwriter.
Our Investor’s underwriter is responsible for determining whether the application package prepared by the processor meets all the lender’s criteria. If more information is needed, the loan is put into “suspense” and you will be contacted to supply more documentation.
If the Investor’s underwriter approves the loan, the investor issues a conditional commitment to lend, works with you to clear all conditions to its commitment to lend, and then schedules a closing time. Conditions to the lender’s commitment may include issues with credit, income, employment or the property that may arise during the processing and underwriting process.
The closing will occur after all conditions are cleared and the investor issues a full loan approval. At the closing, the investor “funds” the loan with a cashier’s check, draft or wire to the closing agent, who disburses funds, in exchange for the title transfer to the property. This is the point at which you finish the loan process and actually refinance or buy the house, subject to the investor’s loan. Closings occur at different places in different states. For instance, some states require that the closing take place at a closing attorney’s office, while others use a title or escrow company. You may also be able to close at your home.