The Loan Process for Home Purchase
You’re ready to buy a home - Here’s what to expect:
STEP 1: MORTGAGE APPLICATION AND PRE-APPROVAL
Complete an Express Application or Full Loan Application and provide it to your lender. A good mortgage advisor will work up that information, ask some additional questions and prepare for a meeting to discuss different loan options available you. Meet with your mortgage advisor to:
- Go over those options and discuss your short and long term goals to determine which scenario best fits your needs
- Sign the application and disclosures
- Provide any outstanding documentation or verifications requested by the lender
- Receive disclosures and information regarding the loan transaction
Obtaining pre-approval puts you in a much stronger position with sellers, since the likelihood of the financing falling through is diminished.
STEP 2: FIND THE HOME
You’ve found the home you want to buy, and your offer is accepted. If you don’t already have Realtor representation, ask us. We’ll be glad to give you a referral to a trusted professional with a proven track record.
STEP 3: LOAN PROCESSING
Once the application has been taken and the property has been identified, we’ll order the property appraisal and private mortgage insurance policy (if applicable). You may be asked to provide additional documentation, or take other recommended action if circumstances warrant. At the same time, your Realtor will assist you in setting up property inspections etc.
STEP 4: SUBMISSION FOR FINAL UNDERWRITING APPROVAL
Our team will organize and submit the loan package to the loan underwriter for analyzing. If you were pre-approved through Desktop Underwriter (DU) or Loan Prospector (LP), the underwriter verifies the documentation previously provided. DU and LP are computerized underwriting systems of Fannie Mae and Freddie Mac respectively.
STEP 5: CONDITIONS OF APPROVAL
There may be some conditions of loan approval that need to be met before the loan documents can be printed. Examples of conditions include re-verifying credit accounts, employment and funds to close.
STEP 6: LOAN DOCUMENT SIGNING
Prepare your wrist! You’ll have a sizable stack of papers to sign that includes the contract (the terms and your promise to repay the loan) plus a heap of disclosures. The escrow company pulls out the items they need and forwards the rest to the funding department. The funding department reviews the documents to ensure the ‘t’s are crossed and the ‘i’s are dotted.
STEP 7: LOAN FUNDING
When all of the closing conditions are met and the docs have been reviewed, the funding department will wire the funds to the title insurance company for disbursement per the escrow instructions.
STEP 8: CLOSING (RECORDING)
Usually the property is recorded in the buyer’s name(s) the next business day following the loan funding. When it records, the house is yours!
STEP 9: MOVING DAY
This is probably the most exciting step - moving into your new home!
We’ll be there for you each step of the way (OK, maybe not on moving day), and when you’re ready to buy your next home or refinance, we’ll be there to help!