Walking Through the Loan Process

If you've never bought a house before, you may be wondering what it's like to apply for a home loan. Here are the steps involved in financing a home. It sounds complicated, but your mortgage/loan consultant and the lender do most of this in the background. Your main job is to provide the information needed upfront and along the way - and to show up to sign papers!

Initial conversation

• Loan consultant interviews you to the financial information needed for preapproval and/or the loan application
  
• You are advised of other documentation required to back up your application

Filling out the loan application with your mortgage consultant

• Together, we complete a loan application
  
• You provide the supporting documentation required, such as bank statements, pay stubs, W2s, etc.
  
• Your credit report is obtained and action is taken if necessary
  
• The various loan options that are available to you are discussed
  
• The closing costs associated with the home purchase are explained
  
• Monthly housing costs are examined

Loan submission

• The loan package is assembled and submitted to the lender's underwriter for review and approval

Loan approval

• The lender approves the loan and the loan consultant notifies all parties of approval and conditions that need to be satisfied prior to ordering loan documents

Locking in your interest rate

• The mortgage consultant keeps you informed about interest rates and locks your interest rate when you are ready

Fulfilling the lender's conditions for your loan

• Satisfactory property appraisal
  
• Preliminary title report
  
• Any supporting documents still outstanding
  
• Verifications of employment, mortgage or rent
  
• Loan consultant works on any potential problems spotted, such as discrepancies in income statements or credit reports
  
• Requests for additional information or documents are made

Lender gives final approval and go ahead

• You are reminded of funds required at closing (estimated closing costs)

Documents are drawn

• Lender prepares loan documents and sends them to the title company
  
• Title company sets a signing appointment with borrowers
  
• Borrowers bring in funds and sign the final loan documentation

Funding

• Lender makes a final review of the loan package to make sure all conditions are satisfied
  
• Lender transfers funds by wire to the title company

Recording of documents

• Title company records the note (your loan commitment) and Deed of Trust at the County Recorder's office
  
• Escrow is closed - and the property transaction is complete!