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About The Loan Process
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What
are the steps
that are taken in
the loan process?
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The loan process changes
in different parts of the United States. The explanation of the loan process
below is a general sequence of events that takes place during the processing
of your loan. Different lenders in different states have their own requirements.
The descriptions below are meant to give you a general idea of what is
required to go from applying for a loan to closing the loan.
Choose
a topic below:
- The
first step - the loan application:
- Do
I have to meet in your office?
- After
I fill out the application, what happens next?
- What
does it mean when my loan is approved "with conditions?"
- What
does "Close Escrow" mean?
- What
is a "Right of Rescission?"
The
first step - the loan application:
As might be expected,
the first step in obtaining home loan financing is to fill out the loan
application (also called a "Fannie Mae 1003", or "Uniform Residential
Loan Application"). Our experienced loan officers will be happy
to assist you in filling out the loan application if you should have any
questions. We will make an appointment to meet with you at your convenience
if you desire. Whether you choose to meet with us or fill in our
online application, you will eventually need to
provide us with some personal and financial information (click
here for a list of what you need to provide). If you are unable
to provide some of the required documents, you can provide them to us
at a later date before your final approval.
Top
Do
I have to meet in your office?
No! It is possible
to complete the loan process without attending a meeting in our office.
This can be done by doing one of the following: filling out our online
application form on our site, we will fill it out for you by telephone,
you can fax your application to us after you print it out, or you can
mail your application to us if you wish.
When we do talk to
you, we will discuss different possible loan programs available to you
that might best meet your needs, the interest rates available, and your
financial and property qualifications for the loan program you've chosen.
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After
I fill out the application, what happens next?
Once you have chosen
a loan program and interest rate, the application has been filled out
and you have provided us with the necessary information,
we will then send out verification forms to verify your employment history
and bank account information, obtain your credit report, order your preliminary
title report from the title company and order your appraisal. Once
this information is returned to us, we will compile your loan documents
and submit them to the underwriter for final approval.
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What
does it mean when my loan is approved "with conditions?"
Your loan may be approved
as submitted, approved with conditions, or a counter offer may be made
for your consideration. If there are conditions on the loan in order
for it to be approved as submitted, we will work with you to satisfy these
conditions. Conditions might include an explanation letter of some
sort, copies of investment documents, copies of divorce papers, or any
number of things that may help clarify your qualifications for the loan.
After the loan conditions
are met (if any) and the loan is approved, the necessary documents are
prepared for closing. The lender will draw up the necessary documents
along with any (prior-to-funding) conditions that have yet to be met,
and in most cases send them to a title or escrow company near to where
you live or your attorney to be signed by you. Your escrow officer
or attorney will arrange for an appointment with you when the loan papers
are ready to be signed.
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What
does "Close Escrow" mean?
The task of closing
the loan is normally the responsibility of the escrow officer, attorney,
or lender. This person or company is responsible for gathering together
all of the necessary documents (deed of trust, promissory note, etc.)
and making sure all documents are signed. Following the lenders
instructions, the escrow officer, attorney or lender then calculates the
various prorations, charges and adjustments (interest on your old loan,
interest on your new loan, money for impound accounts for taxes and insurance,
etc.), makes sure all of the funds are deposited (if any) and provides
you with a settlement statement showing all of the costs involved in the
loan. Whoever handles the escrow responsibilities also makes sure that
all of the parties involved in the loan process are paid after the loan
funds. Your loan will then "close escrow" and your new loan
will be recorded.
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What
is a "Right of Rescission?"
After you sign the
loan papers, they are sent to the lenders funding department where they
do a final check to see that everything is in order. On a refinance,
there is a 3-day right of rescission period. This means that you
have 3 days from the day you sign the papers to change your mind about
following through with the loan. If you have not exercised your
right to rescind during the 3-day right of rescission period, the funds
are released. The loan funds are then distributed to the proper
parties and the documents are recorded at the county recorders office.
The loan is done!
NOTE: There is no right of rescission
on a purchase.
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Need
More Loan Information?
Go
to the Mortgage Information page
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