The Loan Process
There can be a lot of unknowns when it comes to applying for a home loan. We’re here to ensure you’re taken care of every step of the way. To help give you an understanding of the home loan process, here are some basics that apply for most borrowers:
Even before you start the loan application, start getting your documents in order. Your loan officer’s goal is to clearly document your financial qualifications for the loan which you will be applying. In order to achieve this, the loan officer will ask you to provide some documentation that supports your income and assets, such as:
- Pay stubs
- Tax returns
- Bank statements
- Other documentation may be needed – this could include gift letters, receipts, deposit slips, etc. Some loans are stricter than others and we may need to know exactly where money is coming from. Where it is going is not always important, but the source will need to be explained for specific types of loans.
Get in Touch
An important first step in acquiring a home loan is to get in touch! Talk to some loan officers and find ones that you like. Ask friends for a reference, or visit your local Chamber of Commerce. Your local Chamber should know people to refer you to. During your first call or meeting, with a prospective loan company, ask questions! You have every right to be informed.
The Loan Application
The next vital step in securing a home loan is to fill out a loan application. Most loan officers will you help you complete the application. Once it is completed, your loan officer will discuss your overall financial goals and then provide you with loan program options. Your available options will be determined by many variables including home affordability, income, credit, debt, and assets.
Making an Offer
If you have already found a house you would like to put an offer in on, you should be preapproved for a loan. (Some sellers’ agents will want to see a preapproval letter.) For more information about preapproval, Contact Us.
When your offer is accepted and you’d like to move forward, you’ll want to get a home inspection done. These are usually optional, but they will help to ensure the home you’re buying isn’t hiding any nasty secrets, like structural damage or dangerous wiring. The findings in the inspection can be leverage for revising your offer or requesting that the seller do some repairs.
Employment and Asset Verification
Once the requested documentation has been gathered, we will verify your previous and current employment and confirm your assets. We will also obtain your credit report. Once you’ve been pre-approved, we will order the preliminary title report from the title company. Once the title comes back clear, we can move forward and order the property appraisal. Once the appraisal comes back with no required repairs this information is returned to us, we will submit the file to the underwriter for approval.
The underwriter is responsible for ensuring that your loan file meets the qualifying guidelines. During their review, it is not uncommon for the underwriter to ask for additional documentation and/or clarification on different areas of the file. These are called “conditions”, and will usually involve you contacting your bank or employer for assistance with documentation.
Your loan can be approved as submitted, approved with conditions, or a counter offer may be made for your consideration. If there are conditions to the loan approval, your loan officer will work with you to satisfy these conditions. Examples of conditions may include explanation letters, copies of financial documents, divorce papers, or any number of items that will clarify your qualifications for the loan.
After any loan conditions are met, the necessary loan documents are prepared for closing. The lender will prepare the necessary documents to be signed by you. Your escrow officer or attorney will arrange for an appointment with you when the loan papers are ready to be signed. This will take some time for explanations and signatures.
Once you and the seller have signed all of the paperwork, the loan package is sent back to us for final review. In order to fund the loan, we will review the signed loan documents and confirm that all outstanding conditions have been satisfied. Once these conditions are satisfied, your loan is funded and you are now a homeowner!