In our very first episode, we give you a bird's eye view of the entire mortgage loan process. Keep in mind that this is a very broad overview to give you an idea of the entire process and that there are many little steps in-between that I did not cover.
1. Complete your loan application
Every borrower’s situation is slightly different, from your goals to income sources. A complete application allows to better understand your situation better and select the right mortgage program for you.
2. Gather your documents
Once you’ve completed your application, and a mortgage program is selected, we will request documents from you to support your income and expenses stated in your application.
Rates are always on the move, sometimes they change more than once a day. Once we have settled on a program and a rate it is important that we move quickly to avoid any unfavorable rate changes.
3. Acknowledge your Loan Estimate and Initial Disclosures
Within 3 business days of completing your application the lender will send you initial disclosures. This are typically delivered to you electronically. There are quite a few pages there, but don’t be intimidated most of these figures are estimates and will be updated trough the process.
Included in this initial package is your Loan Estimate. Your Loan Estimate will outline your rate, APR, monthly payment, and costs. Again, keep in mind that these are estimates.
4. Submitting your loan to underwriting
Now that we have a completed application and your documents it is time to submit the loan to the underwriter. The underwriter’s job is to determine if the loan qualifies for the selected mortgage program according to the lending guidelines.
5. Conditional approval
Your loan has been conditional approved. This means that your file met all the lender’s criteria. At this stage there are still several things that may need to be verified, that is the reason the approval is “conditional.”
6. Acknowledge your closing disclosures
Your closing disclosures are very similar to your initial loan estimate. However, the Closing Disclosures are more detailed. These are not your final documents but acknowledging them early will trigger the 3 days of recission period and will allow us to start scheduling your closing.
7. Cleat to close
Congratulations! You are clear to close. If this is a purchase or an investment property refinanced, we are done. However, if this is a primary residence refinance there is a 3 day right of recission that must be observed.
Again, please keep in mind that this is very broad overview of the process and that there many details that may vary between borrowers and loan programs. Please don’t hesitate to reach out with any questions you may have regarding this process, we are always happy to help.