Once you’ve made your decision on a lender, these are the steps of the process:
The Application – We will obtain all pertinent documentation to avoid unnecessary delays. Various fees and down payments are discussed at this time and you will receive a GOOD FAITH ESTIMATE (GFE) and Truth-in-Lending Statement (TIL) within three (3) days, which itemizes the rates and associated costs for obtaining the loan.
Ordering Documentation – If we have not already done so in the pre-approval stage, your mortgage broker will order a credit report, verification of employment and funds to close, mortgage or landlord ratings, a preliminary title report and any other necessary supporting documentation.
Awaiting Documentation – Within one to two weeks, we will begin to receive the supporting documentation from your employer, landlord and banks. As it arrives, your mortgage broker will check all documentation is checked for any irregularities and any additional items needed are requested.
Loan Submission – Once all the necessary documentation is in, the loan processor puts the loan package together, your loan agent prepares a cover letter, and your completed file is submitted to a lender for approval.
Loan Approval (Underwriting) – Loan approval, or underwriting, generally takes place anywhere from a few days to a week or more, depending on the bank and their current workload, and it may take slightly longer if mortgage insurance is required. “Mortgage insurance underwriting” occurs if the borrower has less than 20 percent of the loan amount to put towards a down payment. All parties are notified of the approval and any loan conditions that must be received before the loan can close. You may then remove your financing contingency.
Documents are Drawn – Within one to two weeks after the loan approval, the lender prepares your loan documents (including the note and deed of trust), which are sent to the title company. The escrow officer will call you to set up an appointment when the papers are ready for your final signature. At the that time, the escrow officer will tell you how much money you will need to bring in to close the loan.
Closing – Once all parties have signed the loan documents, they are returned to the lender, and the package reviewed. If all the forms have been properly executed, the lender sends the loan funds by wire transfer. This is the point which you finish the loan process and actually buy the house.