The Loan Process

So, you have applied for your loan and now you are sitting by the phone wondering, "what is going to happen next?"  Most people, (even some agents) don't really know what goes on when they apply for a loan.  Well let's demystify the process so you can walk away from the phone and enjoy your life!

First thing is you have found a Loan Officer you like, such as myself :) or were refereed to by your Agent, such as myself :) and have gone through a full Loan Application, usually called a 1003 (Ten-O-Three).  You have disclosed every piece of vital information you have and feel comfortable enough to proceed with the loan process.  Here is what happens next:

1. You will be asked to sign disclosures such as a Borrower Authorization Form which is used as permission to pull your credit.  The Officer may or may not go over the details of your credit report with you.  I make it a point to make sure the information enclosed is accurate and up to date before my clients leave my office.  This prevents hang ups later in the loan process.

2. Your loan is then polished and usually submitted through an automated underwriting engine, either through Fannie Mae Desktop Underwriter for Government Loans, or a lender specific website.

3. The approval comes back and a Good Faith Estimate and truth-In-Lending form are sent out to the Borrower (s) with the terms and estimated closing costs of the loan within 72 hours of the application.

4. Assuming the home has been chosen...the Title Report, and Appraisal are ordered and an Escrow account is opened. The Appraisal usually entails a deposit by the Lender.

5. After an appraisal and title search are completed, the loan file is then submitted to the lender for underwriting for approval.  Any conditions that need to be fulfilled are then requested at this time. i.e. check stubs, account information, verification of employment etc...

6. The client is notified of the condition of their loan and asked for any final documentation needed to close the loan.  Then Closing Documents are ordered and all pre-close conditions are satisfied.

7. Documents are prepared by closing company and funds are allocated in Escrow.  When this is finished, an appointment is made with the borrower to come sign documents.

8. The Escrow company sends the completed package to the Lender for final review.  The Borrower has a three day rescission period where the transaction can be voided at the borrower's request.

9. The Lender does one last verification of employment before releasing the funds to the Escrow company.

10. Escrow pays all liens and releases all funds to proper agencies and sends loan fees to the Lender.

                                                           The End! Happy Home Ownership!                                                 

**This is merely an overview of the loan process...if I have missed something important, let me know and I will include it at a later date.  Just don't be too critical, Thanks! Heritage Home Loans