The
Loan Process, What to Expect
What to Expect . . .
A. The processing phase
Step
1: The loan file is opened.
A loan application is completed.
Basic
file documentation is collected (pay-stubs, W-2ís,
bank statements, etc.).
A pre-qualifying credit report is ordered.
Escrow
is opened and a preliminary title report is ordered.
Step 2: The loan is pre-qualified.
Basic
documentation is reviewed and any necessary clarifications
are made.
The pre-qualifying credit report is reviewed with
client.
Loan scenarios are discussed and desired loan terms
are determined (type
of loan, loan amount, interest rate, length of loan)
Step 3: The loan file is completed.
Any additional documentation required is collected.
The appraisal is ordered and received.
The
final credit report is ordered and received.
B. The approval phase
Step 4: The loan file is submitted to lender for underwriting
and approval.
Step 5: Lenderís approval conditions are satisfied.
(Lenders sometimes request additional documentation
to further support the particulars of the file. This
can be as simple as updating a pay-stub or getting
additional information from the appraiser, or as detailed
as providing the paperwork to show a transfer of funds
which are being used for a down payment from one account
to another.)
C. The closing phase
Step 6: Final loan terms are decided and the loanís
interest rate and term are locked in with the lender.
Step 7: Loan documents are ordered and delivered to
escrow for signing.
Step 8: Loan documents are signed and returned to
the lender for final review.
Step 9: Loan is funded by the lender, the deed of
trust recorded at the county recorderís office,
and the funds are disbursed by the escrow company.
(Note: There is a 3-day recession period for refinance
loans. A refinance loan funds on the fourth business
day following the date loan documents were signed.
A recession period does not apply for purchases or
for the refinance of a non-owner-occupied property.)
