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Complete the loan application.
This is the most important step. The information can be gathered in
person or over the phone. Now is the time to disclose all material
financial data, and discuss financing options available. The quality
of this meeting is essential to a smooth loan approval. An application
fee may be required by the lender.
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Order supporting documentation
Immediately following the application, supporting documentation is
ordered. This includes credit reports, verifications of deposits,
income, and mortgages. Certain other documents will be requested:
W-2's, pay stubs, bank statements, etc. The lending institution
requests an appraisal of the home, a credit report and verification of
employment and assets, such as bank accounts. While awaiting the
return of the verifications, both realtor and borrower will receive
weekly progress updates.
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Loan cost estimate
The lender will provide a booklet containing specific loan information
and a good faith estimate of closing and related costs. An estimate of
your loan costs, in the form of an Initial Truth in Lending Disclosure
Statement (Reg Z), is issued.
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Lender evaluation
The lender evaluates the application, along with supporting
documentation.
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Loan approval
Pop a cork! The loan is approved. All parties are notified. Any
further conditions required by the lender are handled at this time.
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Loan documents
The lender will draw loan documents and send them to the title company
for final signatures.
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Closing
Sign closing documents. The signed documents are returned to the
lender. After review, the loan is funded (funds sent from the lender
to the Title Company).
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Funding
The lender disburses the funds to the settlement or closing agent.
Seller is paid, and title to the home is yours.
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Recording
Appropriate documents are recorded at the county recorder's office.