Financing Your New Home

 

The Loan Process

In order to obtain a mortgage, lenders require specific documentation to substantiate your financial situation. The overview here covers the six basic steps needed to process your loan application and make an approval decision. Your loan officer will work with you to obtain all necessary documentation and guide you along the way.

1. Application

Your application is the official start to the process and focuses on choosing the best loan program. You'll read and sign each loan document and provide your intent to proceed. Once you receive your loan estimate, you'll submit the necessary documentation needed to move forward.

2. Home Shopping

After your application is accepted your lender will supply you with your interest rate and a maximum loan amount and then give you a letter of pre approval. This is when you would start your search by contacting your Realtor. Your Realtor will consult with you to determine what you're looking for in a new home and arrange showings.

3. Loan Processing

After you find the home you want to purchase, a loan processor will put together your entire loan package so that it may be underwritten. The processor reviews your credit report, verifies your debts, payment histories and employment status.

4. Appraisal

An appraisal determines the fair market value of the property and is added to your loan package to be used in underwriting. In most cases, you will need to be present at the property to grant the Appraiser access.

5. Underwriting

An Underwriter reviews your application, documentation, financial information, sales contract, appraisal and title to be sure all the necessary requirements have been met based on the loan program you are applying for.

6. Closing

At a minimum of three days before your closing date, you'll receive your closing disclosures, which will give your cash to close amount. On the day of your closing, you will sign all the final documents and the loan will be funded. Your first mortgage payment is typically not due until the second month after your closing date.

 

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