LOAN PROCESSING : STEP BY STEP LOAN PROCESS...........
THE LOAN PROCESS:
To some people the loan process can seem like a dark black hole. Hopefully the following “step-by-step” can be your flashlight to exactly what goes on when you apply for a loan. A couple of things to keep in mind while
The very first step in any loan process is a “question & answer” session with your Loan Officer. Your Loan Officer will ask you some basic questions to find out what your needs are. These questions are to gather information so we can guide you toward the best product for your situation and to qualify you for that loan. These questions will include questions about your job, your income, your debts and your assets ie bank and/or investment accounts. Usually a credit report is also obtained at this time to see what your “credit score” is. This “question & answer” period is probably the most crucial step in the entire process. It is so that your Loan Officer can fully understand your situation so that he/she will be able to design the best possible program for you.
Once we have your credit scores and have a good, solid understanding of your income, assets, and most importantly – your needs, then it is our job to find you the best program, rates & terms designed specifically for your situation. We have hundreds of Direct Lenders at our disposal to get you the perfect program for you.
Preparing the Application documents:
Once we have discussed your loan options and decided on the program that best suits your needs, we then fill out the application paperwork and prepare it for submission. We will send the application papers and all the disclosure documents to you via overnight mail. We usually send these with a checklist of things we will need you to gather for us ie paystubs, income tax papers, bank statements, if applicable. This is the “support” information that may be required for the application.
Once you receive the documents, you will sign, date and return them to us so that we can begin the processing of your loan file. Please note that time is of the essence once the application is in the works and you should try to return these documents just as soon as possible. If there is anything on the checklist that you cannot obtain or have questions about, please talk to us so we can brainstorm on alternative documentation. Do not hold up returning the signed package if you are missing a paystub or something. As mentioned, these documents are time sensitive and need to be sent back as quickly as possible to keep the application moving forward.
Once we receive these signed documents we will order an appraisal on your property. The appraiser is an independent third party who is licensed to do this. All appraisals are paid for up-front at the door at the time of inspection and in the case where you are purchasing a property, either a check is left with the real estate agent or sent to us payable to the appraiser. The appraiser will contact you (or your realtor) to set up a convenient time to do the inspection Appraisals can take anywhere from 2 days up to 2 weeks to complete depending on the appraisers current volume. Different parts of the country have different turn-times.
Next we review all information you have provided to us to verify accuracy of the application. We will pre-underwrite the loan to make sure the loan is within the guidelines of the lender to whom the loan will be made through. We also order any payoff information from your current mortgage lender (if applicable) and order the title work to be done at this point.
Once we receive the appraisal we will forward the entire package to the lender’s underwriting department. There it waits it’s turn in line to be underwritten. The time frame for this can be as little as 1 day, or sometimes up to 3 weeks during extremely busy times. The underwriting process itself takes only a couple of hours, however, it’s the “waiting-our-turn” that can take some time.
Once the file comes out of underwriting and is “Approved”, the underwriter faxes us a “Conditional Approval”. This is an approval subject to usually some minor things such as homeowners insurance to be in their name; clear title report; sometimes an additional paystub is needed or maybe an updated bank statement. We will call you at this point and go over the approval with you.
We gather the final items requested on the Conditional Approval and send them into the underwriter. Usually they request 24 hours to review the conditions and will give us a “Clear-to-Close”. Once the file has been cleared it goes to the Closing Department to prepare the closing package. At this time the title company will contact you to schedule a good time for all parties to close the loan.