The residential loan process may seem far from simple. We'll walk you through the process so that you can feel confident about making a home loan decision. We'll explain every step of the loan process, including a breakdown of all fees and costs. You’ll also know exactly when and how to submit your application. Here are the major milestones you will reach as we process your mortgage application.
First, you will fill out a short application
Second, you will sign your full application
Third, you will pay the application fee
The loan is Submitted to processing.
Your Loan Officer collects and verifies all documents necessary to prepare the pre-approval. This will allow us to know you "the borrower", and the property you are financing.
During processing, the account processor:
* Begins verifying assets
* Orders a home appraisal to determine the value of the property (if/when needed)
* Runs various compliance and eligibility checks to ensure the process advances quickly and smoothly
Common documentation requested by underwriting includes, but is not limited to:
* Evidence of Earnest Money
* Asset Verification
* Borrower Letter of Explanation (LOX) "when applicable"
* Gift Letter
* Fully Executed Purchase & Sales Agreement
* Source of Large Deposits
* Verification of Employment (VOE) "when applicable"
Next step: Processing submits the loan file to underwriting for initial review and approval.
The Loan is Conditionally Approved
What is conditional approval ?
A conditional loan approval means that the Underwriter has signed-off on the parameters of the loan and most of the documentation, but still needs a few more items before fully approving the borrower for the loan.
The processing team contacts you, the borrower, to review the conditional approval and discuss any additional required items, as well as any ancillary documents that are needed to finalize the loan. This documentation can include, but is not limited to:
* The completed appraisal (or updates to the existing report)
* Additional verifications
* Standard in-house items required for closing
Once all conditions have been met, the processing team will send the file back to the underwriter for a final review and final approval.
Next step: Once the loan is finalized and approved, a Mortgage Professional will schedule the closing date with the closing attorney or agent.
The Loan is Clear to Close,
"Clear to Close" means the Underwriter has signed-off on all documents and issued a final approval.
The mortgage team schedules your closing and reviews the CD/HUD-1 Settlement Statement.
The CD/HUD-1 Settlement Statement, is a standardized mortgage lending document that details the finalized terms for the loan, including a breakdown of all costs and fees.
Next step: Closing the Mortgage
Closing processes vary slightly depending on the type of transaction, as well as local, state, and municipal laws.
The type of transaction—purchase or refinance—determines who can provide you with accurate final numbers.
* Purchase: You can receive estimated figures from your Mortgage Professional, but they'll need to speak with your local Title Company and/or Real Estate Attorney for final numbers.
* Refinance: In most states, you won't be required to use an attorney to close. In that case, you should speak with your Mortgage Professional for the bottom line.
What to bring to the closing:
* Photo Identification
* Bank Check or wire from an approved account to cover the closing costs and down payment (unless the money was wired). NOTE: Your Closing Attorney/
Your agent will advise you on the best way to transfer funds for your closing.
Whether purchasing or refinancing, prepare to sign a lot of documents!
* Purchase: While the process varies by state, typically a professional explains every document and notes where to sign. The lender's wire may need to clear before you're handed the house keys and provided with copies of all the documents.
* Revinace: Depending on local laws, an agent from the title company will explain each document to be signed. If refinancing a primary residence, the loan will be funded once the 3-day right of rescission has expired. If refinancing an investment property or second home, the loan will be funded on the same day.
Next step: Funding the mortgage.
The Loan has Been Funded,
The final step in the loan process is now complete: Your loan has been funded!
At this time, all documentation is complete, and the funds for the loan have been disbursed to the seller (purchase) or to the payoff of the prior loan (refinance).
You should receive your first payment statement, schedule date, and coupons on the day of closing. This should be used to make the first and possibly second loan payments.
* If you did not receive the statement or cannot find it, you can reach out to your Mortgage professional for a copy
Final Step: You'll receive correspondence in the mail from the final servicer (the company to which you will make all subsequent payments). This information details where to make future payments and how to set up auto-pay if desired.
Hopefully, this breakdown helps you understand the inner-workings of the mortgage process. Don't hesitate to contact us with your specific questions along the way. We're here to simplify a complex process and provide the kind of personal service and advice you deserve. We're here to get you a home.
*** Beyond Financing, Inc. cannot guarantee that an applicant will be approved or that a closing can occur within a specific timeframe. All dates are estimates and will vary based on all involved parties levels of participation at any stage of the loan process.
The applicant is subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of an application does not represent approval for financing or an interest rate guarantee. Restrictions may apply, contact Beyond Financing, Inc. for current rates and more information. All information provided in this publication is for informational and educational purposes only, and in no way is any of the content contained herein to be construed as financial, investment, or legal advice or instruction. Beyond Financing, Inc. does not guarantee the quality, accuracy, completeness, or timeliness of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error free. Some information in the publication may have been provided by third parties and has not necessarily been verified by Beyond Financing, Inc. Beyond Financing, Inc. its affiliates and subsidiaries do not assume any liability for the information contained herein, be it direct, indirect, consequential, special, or exemplary, or other damages whatsoever and howsoever caused, arising out of or in connection with the use of this publication or in reliance on the information, including any personal or pecuniary loss, whether the action is in contract, tort (including negligence) or other tortious action. Beyond Financing, Inc. does not provide tax advice. Please contact your tax adviser for any tax related questions.