Step-by-Step Loan Process
- A Loan Officer listens to your needs, then discusses the loan process and programs, as well as estimated rates and fees based on what was conveyed.
- Only when the client is comfortable, do we move to the next step.
- Fill in application either online, or over the phone with the Loan Officer.
- We pull your credit report upon permission.
- Client submits necessary documents, including:
- Most recent (30) days-worth of paystubs
- 2017/16 W2 Forms
- 2017/16 Federal Tax Returns (all pages, all schedules, even if blank)
- Most recent (2) months-worth of bank statements (all pages, even if blank)
- Most recent (2) months-worth of investment/retirement statements (all pages, even if blank)
- Photo ID’s (Driver License and/or Passport accepted)
- If you own other properties, we need the most recent mortgage, home insurance declaration page, and HOA statement from each property
- If you are self-employed, please inform Loan Officer for further direction
- The Loan Officer submits the application with verified income and assets into an Automated Underwriting System backed by Fannie Mae or Freddie Mac, which typically results in an approval that gives the confidence needed for the client to go home shopping with a Real Estate Agent.
- An official Pre-Approval Letter is written on behalf of the Lender that will be submitted to the Listing Agent along with the Residential Purchase Agreement Offer.
Accepted Offer/Escrow Process
- Once your offer gets approved, it’s go time, and we typically will ask for updated documents (including bank, investment, paystub, and property statements).
- We communicate with the Buyer Agent and Escrow to receive necessary documents, including the Residential Purchase Agreement, Escrow Instructions, Preliminary Title Report, and HOA documents (if applicable).
- The Loan Processor will send out the Loan Estimate Package to be e-signed. These documents include important disclosures, estimates, borrower authorization, and intent to proceed. Each client will need to e-sign the documents, and print/return any ‘ink-sign’ documents.
- Once the Loan Estimate Package is e-signed, the Loan Processor will submit the entire loan package to the Underwriter in anticipation of an Underwritten Approval within 2-4 days depending on the type of loan.
- After the loan has been submitted to the Underwriter, the appraisal is ordered. In most cases, the client will need to provide credit card information to order the appraisal. This is typically the only upfront fee charged to the client (unless the client is purchasing a condo).
- If the transaction involves a condo, certain lender-required condo documents will need to be provided to the Underwriter. Our team will do whatever we can to mitigate the documents needed, and the expenses involved. Any fees quoted by the HOA and/or management company for specific documents and forms will need to be charged to the client upfront. The documents include important information about the owner occupancy ratios, levels of insurance, and if there is any litigation on the condo complex.
- Once the Underwritten Approval comes back, it will contain conditions that need to be fulfilled to obtain our ‘Clear-to-Close’ Approval. A Clear-to-Close Approval means there are no more documents needed (by any party of the transaction) to go to docs.
- This Conditional Underwritten Approval will include documents that the Processor needs to collect and submit to the Underwriter. For example, the appraisal report will need to be submitted, as well as any condo documents, and especially any updated documents needed from the client. We will also need a home insurance quote from the client.
- At this point, we’re roughly 10 days into the transaction, and the appraisal has come back. Our team shares that report with the client and Buyer Agent. The Processor will also submit the appraisal and any other documents collected to the Underwriter in anticipation for a strong updated approval, or even better, our Clear-to-Close Approval.
- It takes roughly 2-3 additional days after the Processor submits the documentation to receive a response from the Underwriter. Once a response is received, typically, our team sends out a Closing Disclosure. This CD is basically a snapshot of the loan at that current time in the loan process. There still can be changes in figures because after the CD is e-signed, the ‘Doc Drawer’ is communicating with Escrow to compute the final numbers.
- At this point, we’re roughly 20 days into the transaction. Any remaining documents needed from various parties of the loan are collected. Examples of trailing documents may include: a termite report, a Seller-credit, an insurance declaration page, a final paystub, etc.
- By day 22-25, we likely have our Clear-to-Close, and the Doc Drawer and Escrow have agreed up on the final figures, and the Closing Docs have been sent from the Doc Drawer to Escrow. Escrow then organizes the documents, includes any of their individual forms, then arranges a notary to set up a signing with the client. Escrow communicates with the clients regarding the remaining balance needed to wire in.
- After the client signs with the Notary, documents are sent back to Escrow and the Lender’s Funder to be analyzed. These final parties ensure all documents are received, and that no pages or signatures are missing. At that point, the Escrow company requests the wire to be sent from the Funder, and Funding occurs. In most cases, we can fund on the same day the client signs, or that very next day. After the deal funds, the Deed, and a few other documents are recorded either on the same day the deal funds, or the very next day
- The loan is done! You get the keys! Champagne celebration is in order!