Every loan follows the same five steps. Here's exactly what happens at each one — so you always know where your file stands.
Pre-qualification occurs before the loan process actually begins. We gather information about your income and debts and make a financial determination about how much house you may be able to afford. It's a good idea to know your range before you start shopping! If you're refinancing, pre-qualification helps you decide whether refinancing is a good idea for you.
The application begins once you've found a property or decided to refinance. You complete a mortgage application for a particular loan program and supply all required documentation. Fees and down payment options are discussed, and you'll receive a Loan Estimate within three days itemizing the rates and estimated costs for obtaining the loan.
Your application package goes to an automated underwriting system — or is manually underwritten. The processor reviews your credit reports, verifies employment, debts, and payment histories, requests written explanations where needed, reviews the appraisal and survey, checks for property issues, and assembles the complete package for the underwriter.
The underwriter determines whether the package meets all the lender's criteria. If more information is needed, the loan goes into "suspense" until you supply it. Once approved, the lender issues a conditional commitment to lend, orders title insurance, works with you to clear all conditions, and schedules a closing time.
After all conditions are cleared and full approval is issued, the lender funds your loan with a cashier's check, draft, or wire to the closing agent, who disburses funds in exchange for the title transfer. This is the moment you actually buy or refinance your home. Closings happen at a title or escrow company, an attorney's office — or sometimes right at your home.
Get pre-qualified today and step one is already done.