The steps required to secure a home mortgage are numerous and the process can seem daunting if you aren’t familiar with it. Therefore, we wanted to take the time to break the process down and explain each step.
1) The first step is to process the loan application. During this step credit is checked, the details of the loan are reviewed, and a general timeline is discussed. The lender, the realtors, for both buyer and seller, as well as Title Insurance and Escrow contacts are confirmed.
2) The second step is to have automated loan approval issued. Loan details are reconfirmed and a more concrete timeline is established.
3) The lender requests an appraisal from an independent appraiser. It usually takes about a week to schedule an appointment, inspect a property and then receive the home valuation report.
4) The next step is to review the value of the property to ensure that the loan is within the boundaries set by the type of mortgage requested. Once the value has been confirmed, documents are reviewed one final time and requests are made for any outstanding documents, which can include bank statements, paycheck stubs, tax returns, etc.
5) Loan rates and limits can change daily. Once the loan type has been identified along with the rate and term, the loan is confirmed or “locked.” This secures your rate and term for that day and allows you to keep your rate and term even if the market shifts.
6) In this step, all outstanding documentation is updated to include the rate, term and amount. The Loan Package is also submitted to underwriting for review and loan approval.
7) Next, the underwriter will review the Loan Package and start the process to get approval of the loan. If any additional documentation is required, it is requested at this point.
8) During this step, conditional approvals are in process and the final loan documents are prepared for signatures.
9) Next, the fun part! The escrow agent contacts the borrower to schedule an appointment to sign the loan documents.
10) After that, Escrow processes the loan package. Final funds must be sent to escrow in order to have a timely closing.
11) We are getting close to the end! The funding department confirms that the funds are ready to be sent over to escrow. Once, Escrow confirms that they are ready to receive the funds, a wire transfer is processed.
12) Finally, the transaction is complete! Funds have been transferred, escrow has confirmed the receipt and the documents have been recorded with the county. Congratulations on your the close of your mortgage and welcome home!
As you can see the loan process is lengthy and requires numerous steps, but we are here to help you navigate the process! Reach out to your local branch and they will be happy to answer any questions you may have regarding the home buying process.