THE LOAN PROCESS
Pre-qualification
Before the loan process officially starts, pre-qualification takes place. The lender will collect information about your income and debts to figure out how much money you can afford to spend on a house.
Before you begin searching for a home, it's wise to determine how much you can afford to spend. If you're looking to refinance your current home loan, the pre-qualification process can assist in determining if it's a good decision.
Application
The application is the first step of the loan process. You can fill it out after you find a property you want to buy or decide to refinance your current home loan. You need to provide all the necessary documents for processing and choose the loan program you want. During this process, you will also discuss the fees and down payment options. Within three days, the loan officer will give you a document called Good Faith Estimate (GFE) and another one called Truth-In-Lending Disclosure (TIL). These documents show the rates and estimated costs of getting the loan.
Processing Your Loan
Typically, the lender will send the application to a computer system that will give them the necessary paperwork to approve the loan. Sometimes, the lender will also manually review the application.
The lender checks your credit reports and paperwork to confirm your job, debts, and payment history. If there are any late payments, collections, judgments, etc., they will ask you to provide a written explanation. They also review the appraisal and survey of the property to see if there are any issues that could affect the loan approval. The lender's processor's role is to prepare all the necessary documents for the lender's underwriter.
Underwriting
The lender's underwriter is in charge of deciding if the application package put together by the processor meets all the criteria set by the lender. If additional information is required, the loan will be put on hold and you will be contacted to provide more documents.
Once the underwriter approves the loan, the lender gives a conditional commitment to lend. They also order title insurance and help you fulfill any requirements needed for the commitment to lend. After that, they set a closing time. The conditions for the lender's commitment may involve credit or income issues or property-related concerns that may come up during the processing and underwriting process.
Closing
The closing process happens after all the necessary conditions are met and the lender approves the loan in full. During the closing, the lender provides the funds for the loan in the form of a cashier's check, draft, or wire transfer to the closing agent. In return for transferring the property's title to you, the closing agent distributes the funds. This is the point where you complete the loan process and officially refinance or purchase the house, based on the lender's loan agreement. Closing locations vary from state to state. For example, some states require the closing to take place at a lawyer's office, while others use a title or escrow company. In some cases, you may even be able to close the deal at your own home.
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Mac Mortgage, Inc. ™ 2024
NMLS #: 1530208, 481052
DRE #: 02014262, 01891696
States Licensed In: CA, TX, SD, FL
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