A. The processing phase
- The loan file is opened. *
- A loan application is completed. *
- Basic file documentation is collected (pay-stubs, W-2žs, bank statements, etc.). *
- A pre-qualifying credit report is ordered.
- 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)
-The loan file is completed and a property is selected for puirchase *
- Any additional documentation required is collected. *
- Escrow is opened and a preliminary title report is ordered. *
- The appraisal is ordered and received. *
- The final credit report is ordered and received.
B. The approval phase
- The loan file is submitted to lender for underwriting and approval.
Step 5: Lenderžs 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
- Final loan terms are agreed upon and the loan's interest rate and terms are locked in with the lender.
- Loan documents are ordered and delivered to escrow for signing.
- Loan documents are signed and returned to the lender for final review.
- Loan is funded by the lender, the deed of trust recorded at the county recorderžs office, and the funds are disbursed by the escrow company.
(Note: There is a 3-day recission period for refinance loans. A refinance loan funds on the fourth business day following the date loan documents were signed. A recission period does not apply for purchases or for the refinance of a non-owner-occupied property.)
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