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What to Expect from the Lending Process

A. The processing phase

Step 1:

- 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.

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 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

Step 4:

- 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

Step 6:

- Final loan terms are agreed upon and the loan's interest rate and terms 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 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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