The Loan Approval Process is relatively simple but can seem very mysterious if it is never explained to you. The best news ever is that it takes less and less time these days.
No matter how fast, however, every mortgage application has to go through these steps:
The key to the loan process going smoothly is the initial interview. At this time, we make every effort to obtain all pertinent documentation so that unnecessary problems and delays can be avoided. To make sure you are prepared, see our Application Checklist.
Sometimes immediately, but in no case more than 24 hours after application, we request a credit report, appraisal on the property, and any verifications required to confirm information that was not documented at loan application. These could include employment, bank account or rental verifications, for example.
As we receive any information requested, we review it for any potential problems and request additional information, if necessary, to solve them. We keep you aware of what is going on through status reports throughout this period. In the past, it often took 60 days to process a loan. That is quite unusual these days. We often can have loans approved and closed in two weeks. It will depend upon your individual circumstances.
Once all of the documentation is in, the loan officer reviews our current programs to make sure that the borrower is getting the best rate and terms. The loan processor then puts the loan package together for the underwriter's review.
Final loan approval generally takes anywhere from 24-72 hours. (An original credit approval may have been provided upfront, in a matter of hours. This review will also encompass the property). All parties are notified of the approval and any loan conditions that must be satisfied before the loan can close. The loan approval is the beginning of the closing process.
Documents Are Prepared/Reviewed
Within 1 to 3 days after loan approval, the loan documents such as the note and deed of trust or mortgage are completed and sent to the title company or attorney's office. The escrow officer or attorney calls the borrower to come in when the papers are ready for final signature. At this time the borrowers are told how much money they will need to close the loan.
Once all parties have signed the loan documents, the loan is funded. The documents are then returned to the lender who reviews them. If any document was incorrectly completed, the lender will contact the appropriate parties for correction.
When the paperwork is complete, the lender or title company will record the documents serving as the lender's security for the mortgage loan at the county recorder's office.
The mortgage lender will provide you with a coupon book, monthly billing statement or option to have your payment automatically drafted each month.