The Loan Process
The Detailed Loan Process
*Purchases*
*Purchases*
There have been many changes in the industry this year, so here is a fairly detailed summary of the loan process for a purchase. This is my recommendation, and will include documents you need to provide.
The single most important thing you can do is get “Pre-Approved.”
To help insure a smooth transaction which closes on time, you must get Pre-Approved BEFORE making an offer and thus entering into a Purchase Agreement.
Here’s how you get Pre-Approved with me and my lender.
1. We start by taking the Loan Application, either over the phone, or you can fill out our user-friendly form at your convenience, and send back to us.
2. You will sign the Borrower’s Signature Authorization Form and we will collect your credit card information so you can pay for the credit report (Approx. $12), and eventually the appraisal fee. This allows us to complete the loan application by populating the liabilities section, and we will know your FICO score to accurately price the interest rate you choose.
3. We send to you the Loan Application, all Disclosures, and the Good Faith Estimate for your signature and return.
4. Also at this time, you will send to us the following documents:
a. Pay stubs for past 30 days for all borrowers.
b. Bank Statements (all pages) for all accounts included on the loan application.
c. W2s for past two years for all borrowers.
d. Evidence of Homeowner’s Insurance (Declaration Page) Note: This will be supplied at the end of the process for a purchase.
e. Copies of Driver’s License
5. We submit the complete loan file to the lender, and run the “Automated Approval.” Note: there is typically a cost of $20.00 for this with some of our preferred lenders. This is known as a “DU” approval, which stands for “Desktop Underwriting.”
6. Once we have “DU” approval, you are now considered “Pre-Approved.” I can now write you a “Pre-Approval” letter on my company letterhead. You are now free to make an offer on a home purchase.
7. The lender will now also mail their Disclosures to you. After a 3 day mandatory waiting period, we are able to order an appraisal once you are in contract.
8. You get an offer accepted, and you enter into a Purchase Agreement.
9. You send in the Purchase Agreement with all addendums.
10. We order the appraisal, and the cost is charged to your credit card you supplied earlier.
11. We order and receive the Preliminary Title Report from the Title Company.
12. The appraisal is received after approx. 7-10 days.
13. Lender receives the appraisal and gives conditional approval. (Note: we may have received the conditional approval earlier, but it would be subject to a satisfactory appraisal.)
14. Conditions are signed off and we are “Clear to Close.”
15. Documents are ordered and sent to Tile.
16. You sign off.
17. Loan Funds.
18. Close of escrow – Loan Records and Title passes. You get the house keys.
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The Detailed Loan Process
*Refinance*
1. We start by taking the Loan Application, either over the phone, or you can fill out our user-friendly form at your convenience, and send back to us.
2. You will sign the Borrower’s Signature Authorization Form and we will collect your credit card information so you can pay for the credit report (Approx. $12), and eventually the appraisal fee. This allows us to complete the loan application by populating the liabilities section, and we will know your FICO score to accurately price the interest rate you choose.
3. We send to you the Loan Application, all Disclosures, and the Good Faith Estimate for your signature and return.
4. Also at this time, you will send to us the following documents:
a. Pay stubs for past 30 days for all borrowers.
b. Bank Statements (all pages) for all accounts included on the loan application.
c. W2s for past two years for all borrowers.
d. Evidence of Homeowner’s Insurance (Declaration Page)
e. Copies of Driver’s License
5. We submit the complete loan file to the lender, and run the “Automated Approval.” Note: there is typically a cost of $20.00 for this with some of our preferred lenders. This is known as a “DU” approval, which stands for “Desktop Underwriting.”
6. Once we have “DU” approval, you are now considered “Pre-Approved.”
7. The lender will now also mail their Disclosures to you. After a 3 day mandatory waiting period, we are able to order an appraisal.
8. We order the appraisal, and the cost is charged to your credit card you supplied earlier.
9. We order and receive the Preliminary Title Report from the Title Company.
10. The appraisal is received after approx. 7-10 days.
11. Lender receives the appraisal and gives conditional approval. (Note: we may have received the conditional approval earlier, but it would be subject to a satisfactory appraisal.)
12. Conditions are signed off and we are “Clear to Close.”
13. Documents are ordered and sent to Title.
14. You sign off.
15. Loan Funds.
16. Close of escrow – Loan Records.
