Loan Process: 7 Steps towards getting your Loan Approved
Step 1: Loan Application
The key for the loan process to go smoothly is in the initial interview. At this time the Lender obtains all pertinent documents so unnecessary problems and delays may be avoided. Your Realtor opens escrow with the title company at this time too.
Step 2: Ordering Documentation
Within 24 hours of application, the lender requests a credit report, an appraisal on the new property, verifications of employment and funds to close, mortgage or landlord ratings, a preliminary title report and any other necessary supporting documentation.
Step 3: Loan Submission
Once all necessary documentation is in, the loan processor assembles the loan package and submits it to the underwriter for approval.
Step 4: Loan approval
Loan approval generally takes anywhere from 24 to 72 ( only if pre-approved, could take 2-3 weeks if no issues) hours. All parties are notified of the approval and any loan conditions that must be cleared before the loan can close. The loan approval is the beginning of the closing process.
Step 5: Documents are Drawn
Within 1 to 3 days after the loan approval, the loan documents (including the Deed of Trust) are completed and sent to the Title Company. The Escrow Officer will make an appointment for the borrowers to sign the final documents. At this time, the borrowers are told how much money they will need to close the loan. Payment must be made by a cashier’s check.
Step 6: Funding
Once all parties have signed all the documents, they are returned to the Lender who reviews the package. If all the forms have been properly executed, a check is issued to fund the loan.
Step 7: Recordation
Upon receipt of the loan funds, the Title Company will record the legal documents necessary to transfer the property into the Buyer’s name. At the same time, the Deed of Trust is recorded to show the new loan on the property. Escrow is now officially closed and you own your home.