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  The basic loan process

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The Basic Loan Process

The Pre-Qualification
This is the initial interview with the lender/loan officer. This can happen either over the phone or in person. The purpose of the interview is to make sure that you will be able to qualify for the home of your choice. Many questions can arise in this process and many answers are given! The numbers are ìcrunchedî so that you will have a complete understanding of what will be involved in order to be approved for the exact loan that works best for you! It is best to have this step finished BEFORE you start the search for your home!

The Pre-Approval
This step is called the preapproval because a property has not necessarily been identified at this point. It is the process of applying and verifying the application. This consists of verification of the following items: a) credit history b) income c) assets/liabilities. Often times other items will need to be verified such as divorce decrees, green cards, etc. This process usually takes from 5 to 10 days. During this time, if a property is identified, a Preapproval Letter can be issued to show the sellers that you have been approved for the loan amount that you are requesting.

Loan Submission
After a purchase agreement has been signed and accepted, the final approval process begins. An Appraisal on the property is ordered and a title report is generated. The lender needs these two pieces of information to make their final approval. During this time, interest rates and loan programs can be looked at more closely and an interest rate can be locked if desired.

When the final approval is issued and the loan is locked, loan documents are printed and sent to the escrow/title company. An appointment is made to come in and sign all necessary papers and finalize any remaining paperwork. The amount of money needed to close is included with these papers.

The money from the lender and the money from you (remainder of the downpayment) is due the day before the loan records. This is called the funding. The money is usually in the form of a cashierís check or it is wired directly into the escrow account.

The loan is recorded with the county clerk and you are notified. The escrow has closed and you own the property!

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