What all goes into the loan process?
The loan process starts once a lender has a 1003 Form, also known as a loan application. With that, they’ll pull a credit report. From there, they’re going to request the specific documentation from you in order to pre-approve you for your loan. As we’ve previously covered, the most common documentation include tax returns, W2s, paycheck stubs, bank statements, and other things of that nature.
Once you’re pre-approved, you’re free and clear to start shopping for your new home and hopefully place a property under contract. Once you’ve placed a property under contract, make sure you forward that contract to your lender as soon as you can so they can update the federal disclosures to be sent to you. We’re required to send you a loan estimate within three days of you identifying a property address to us.
Once your lender has those disclosures electronically signed, they’ll be able to move your file forward into the underwriting phase. During the underwriting phase, the underwriter will review everything and issue a conditional loan approval. At that point, the processor will introduce themselves to you and send you a needs list to help clear the conditions of the loan. By “conditions,” we usually mean an updated bank statement or paycheck stub.
Once final loan approval is granted, the file will be sent to a pre-closing quality control reviewer, and then onto the closing department where the closing package can be prepared for you. Once the closing disclosure gets sent to you, it has to be acknowledged by you three days prior to closing, or the closing would have to be pushed back. Once the lender has the closing disclosure, the next step is for you to show up at the official closing with a valid photo ID and any certified funds that are required for it.
Stretch out your forearm beforehand, because you will be signing a lot of documents. After that, you can count yourself as a happy owner!
If you have any more questions or need help with this process, just give us a call or send us an email. My team would be happy to help.