Pre Qualification is typically the first step in the home buying process. Often, your Real Estate Agent will ask if you have been pre-approved. You can obtain a pre-approval letter from your Loan Officer by providing him/her with some financial information. The pre-approval letter will tell you the type of loan and purchase price you qualify for.
You may begin your official application once you have found a home and have a signed Purchase Contract by you and the sellers. Once your application is submitted, your loan officer will review all of the credit and financial information provided. Your loan officer will then have you sign the initial application package. The application package typically has between 26 and 38 documents for you to sign. These documents will include the interest rate, terms, and costs of your loan. We recommend that you closely review these documents. This process typically takes 1-4 days.
During this phase your Loan Officer requests documents from third parties. These items include: SSN verification, tax transcripts, verification of employment, title report, appraisal, and other regulatory compliance documentation. This process typically takes 1-2 days.
After the documents in the set-up phase are ordered, your loan is passed on to the processor. Your processor will review all of the third party documents as they are received, along with the income and asset documentation you provided to confirm accuracy. They will review your appraisal to ensure that it is compliant and prepare the file to be underwritten and approved. Often, your Loan Officer may request additional documents from you at this stage. This process typically takes 10-15 days.
The underwriter has the final say on if a loan will be approved. He/she will closely review income, assets, property, appraisal, and other regulatory compliance documentation to ensure that the file meets industry guidelines. Occasionally, we may request additional documents from you at this stage. This process typically takes 2-4 days.
At least three days prior to closing, you will receive an initial Closing Disclosure (CD). This document will contain the settlement costs that are associated with your loan. Once the CD is signed and three days have passed, you are able close on your loan.
At closing you will meet with the title company to sign legal documents finalizing your agreement regarding the terms and conditions of your mortgage.
If you are purchasing a home, the day after you have signed the closing documents the funds will be disbursed, recorded, and title company will transfer ownership of the property to you.
If you are refinancing, most transactions have a three-day right of rescission after signing the closing documents. Your loan will be funded and recorded; the transaction will then be complete.