While all these other things such as appraisal, inspection and loan processing are taking place, the Title Company, where the agent took your contract, is hard at work. They are diligently searching through the ownership records and all other records to be sure that the current property owner can convey clear title to the property you are interested in buying.
Any liens that are found will have to be cleared up before closing or at closing. This is so that you can rest comfortably in your new home without worry that someone who did work on the house years earlier, or a past lender could show up and demand that you pay a balance that is due against the property. The title company will issue a “Title Policy.” This assures you that the title that is being passed to you is clear. This policy is generally paid for by the seller, and is required by the mortgage company.
In most cases the only lien you will have on the property is a fresh new one. This is the one you are creating with your new mortgage.
Meanwhile, the loan company is getting together all the verifications they need to decide about your credit worthiness. These are put together with the appraisal information, which we assume should come in for about the same amount as your offer for the house, and the assurance the property has a clear title. Then this entire package goes to the underwriters for the loan company. They study everything to see if you and your house are a good fit and can afford to live together.
Usually the study process takes several days but can extend into weeks if there are any questions. After the underwriters make a decision, if all is well the package goes to the closing department. It is there that all the legal documents are drawn. Sometime in all this the survey will be ordered unless the seller has a past one that the loan company and title company chose to use. If a new survey is ordered, you will notice cute little colorful flags appear on your intended property. A picture of the property is also drawn with all the improvements and the boundary lines. This is then carefully reviewed to be sure there are not any encroachments. The title company sends a title commitment to the lender. You will be notified that you need to have your insurance agent send a binder for the required insurance to the title company so that closing figures can be calculated. You will be sent a copy of the proposed closing statement for your review. This will give you the figure you need to get the cashiers check for, or if you prefer, the amount of funds you can wire to the title company for the closing.