Thursday, September 15, 2011

The Loan Process

What does the loan process really entail? Why does it take at least 30 days to close a loan? Let me give you a run down of what actually happens during the loan process:
1.) Loan application and gathering of paperwork. Sometimes the gathering could take days and weeks. But the clock hasn't even begun yet! You will find out at this point how much you qualify for and what the terms of your loan are.
2.) You go out and find a property and make an offer. ONce it's accepted, then we are in contract! Day 1 begins!
3.) Loan is submitted to an underwriter and sometimes, we will need to update some income and asset docs at this point.
4.) Appraisal is ordered. This whole process from start to finish could take at least a week especially during the refi boom or when rates are low.
5.) We get a "conditional" approval. This means approval is subject to the list of conditions listed on the approval.
6.) We get more paperwork and submit it to the lender. If the file is super complete from the start,then we get to skip this part.
7.) Underwriter approves the loan and we are now cleared for docs.
8.) We order docs. That means we fill out a form requesting for the documents to go to the title company with all the terms we discussed during the rate lock conversation.
9.) Docs are at title. Yahoo! You go there, or the notary goes to you and you sign loan docs!
10.) If this is a purchase, the funding happens about 2-3 days later. If it' s an owner occupied purchase, then it takes about a week.
11.) Loan funds. Funder sometimes finds more missing items!
12.) We are on record with the county recorder and the loan is done!!

It's not as bad as some people think!!