The loan process can be a bit of a mystery, especially because a lot of the work happens behind the scenes.
Below is a general outline of the process. Knowing what to expect and understanding where you are in the process can reduce some of the uncertainty in waiting for your loan approval.
We strive to process your loan as quickly as possible and keep you updated as things progress.
Our secure online application is the preferred way for you to apply for a loan, including a loan pre-approval if you haven't started shopping for a home. Submitting a complete application without missing important details (like a full 2 year employment history) is crucial to properly setting up your loan.
Once you've identified a property and have a signed purchase contract, or if you're refinancing and ready to move forward, you'll receive a link to your electronic loan disclosures. These will outline the initial terms of your loan. The package will include your initial loan application to be signed, and will also provide several other important notices and authorization forms.
Once we've received your signed disclosures and initial documentation, your loan can be submitted to underwriting. Underwriting is the process by which the lender will calculate and verify your qualifying income, review your credit history, review your assets to make sure you have sufficient funds available, and ask for any additional clarifications or documentation needed. The underwriting department will determine whether you meet the loan qualifications.
Once you've entered underwriting, we often order the appraisal simultaneously to keep your loan on track for closing. The appraisal will provide an opinion of value determine how much the property is currently worth. Your maximum loan amount will be a percentage of this value. The appraisal fee is an out-of-pocket expense that must be paid at the time of ordering. We cannot accept any appraisals ordered outside of the loan process, but if you started the process with another lender, our lenders may be able to accept a transferred appraisal in some cases.
Typically the first round of underwriting will result in a conditional approval. This provides us a list of additional requirements or paperwork needed to approve your loan. Submitting all of these conditions together, and quickly, will help expedite the processing of your loan application. A satisfactory appraisal is necessary for approval, and so the appraisal will also be reviewed by underwriting once it is completed by the appraiser.
Once your loan is clear to close, or "CTC", that means either that all conditions have been cleared, or enough conditions have been cleared for the lender to issue loan documents for you to sign.
*Clear to close status means that you are very close to closing, but any sudden changes in your income, employment, credit, or monthly liabilities can still cause your loan to be denied. Occasionally lenders will have prior to funding conditions that must be satisfied.
Once loan documents are issued, the escrow company will set up a time for you to sign paperwork either in their office, or with a mobile notary. Many clients prefer the convenience of a mobile notary, allowing you to sign at your convenience at home or work. At this point you will also need to speak to the escrow officer to send your remaining cash to close (down payment and closing costs) to escrow.