An Overview of the Loan Process
1. Get Pre-qualified
To pre-qualify borrowers, we look at two factors: the borrowers' ability to repay the loan and their willingness to repay the loan. We judge the former based on their income and debts. We judge the latter based on their credit history. Once we have gathered information about a borrower's income, debts, and credit, we can determine how large a loan the borrowers can afford and issue a pre-qualification letter.
At this time we encourage borrowers to order a copy of their credit report through our Web site pre-qualification process. This gives us a chance to review their credit report with them and help them correct any negative issues that may affect loan approval before loan application.
2. Loan Application
With the aid of one of our mortgage professionals, the borrowers complete the loan application to describe their financing needs and their ability to afford the loan. We discuss loan program options and help the borrowers decide what options best meet their needs. Within three days, we provide a Good Faith Estimate and Truth-in-Lending Statement that estimate the total costs of financing and the loan closing costs.
3. Organize Your Documents
When the borrowers initiate the application, we provide a list of documents needed to complete the loan process. This list includes documents like W-2's, tax returns, pay stubs, and bank account statements. We encourage borrowers to provide all requested documents at one time as we cannot submit the loan for approval until we have a complete package.
Once the application has been completed, loan processing begins. We order an appraisal, title report, and any other necessary reports. We verify the information provided on the application, such as income, employment history, rental history, and bank deposits. We review the borrowers' credit report for issues that may affect loan approval and help the borrowers correct or explain them. We review the sales contract for issues that may affect closing. We assist the borrowers with insurance requirements. We examine the reports (appraisal, title, etc.) for issues that require further investigation or explanation. Finally, we put it all together in a loan package.
Once we have a complete loan package, we submit it to an underwriter who makes the decision whether to approve the loan. We work closely with the underwriter to resolve any issues or questions that might prevent loan approval. At this time we also offer the borrowers the option of locking the interest rate.
6. Loan Approval
When the underwriter is satisfied with the loan, we receive a loan approval. We notify the borrowers, their realtor, and the seller's realtor (if applicable) and arrange a closing date. We advise the borrowers of the amount they must bring to closing to cover any down payment and closing costs.
7. Very Smooth Closing
Closing typically occurs at a title company. The borrowers usually appear in person to sign the loan documents, but we can handle closings by mail, as well. We try to attend all closings to help our borrowers review documents for correctness and to answer any questions.