The Loan Process

Determine Your Loan Amount

When deciding how much you would like to borrow, you must determine what kind of monthly payment you can make.  Most guidelines recommend that housing expenses be limited to thirty to forty percent of your income.  Consider other financial obligations both present and future such as car payments, medical expenses, and tuition costs.  Your current debt levels, employment status, and credit history will also play a large role in the amount you are able borrow.  The affordability and prequalification loan calculators on our website can help you estimate an appropriate loan amount.  You can also contact us; once we’ve helped determine your loan amount and term you’ll be ready to be pre-qualified.

Pre-qualification

During prequalification our loan officer will work with you to determine a suitable loan amount, program, and term that best meets your needs.  He or she will ask you for information about your income, debts, and obtain your credit report.  The loan officer processes this information through an automated underwriting system to determine which loan amounts, programs, and terms you qualify for.  It is a good idea to prequalify for several different loan programs as these will impact the amount you are eligible to borrow.  Once you've determined the loan program and term that you qualify which best fits your needs, then you are ready for the next step.

The Application

The application can begin once a loan program is chosen.  The application can be filled out with the aid of your loan officer or on our website.  You will need to provide any required documents for your loan program.  The loan officer will discuss with you the various fees and estimated closing costs of your program.  A Good Faith Estimate and Truth In Lending statement will verify these costs in writing within three days of your application submission.  The loan package, consisting of the application and supporting documentation, will then be submitted to processing.

Processing

Once the loan package is submitted to processing, the processor will collect all the documentation needed to complete the loan and will order any verifications needed.  Gathering  this information can take several days and requires coordination and cooperation with title companies, appraisers, your employer, and banking institutions.  The processor may contact you with a request for additional information or documents to complete the loan file and submit it to underwriting.

Underwriting

The underwriter has final say in whether a loan file is approved or denied.  Using the documents gathered by the processor, the underwriter analyzes your finances to determine the risk associated with the application.  They must have all the documentation necessary to get an accurate view of your financial situation as it is his or her job to minimize the risk of foreclosure and default.

If you meet the guidelines of your loan program and are deemed a good risk based on past financial behavior, then the underwriter will issue a conditional approval listing the remaining documents needed to close and fund the loan.  If the underwriter finds the application outside of their lending guidelines, then you may need to work with your loan officer and look at other possible loan programs. 

Closing

Once approved, your loan package will be transferred to the closing and funding department.  The closer notifies the closing attorney of approval and verifies the closing costs.  The closing attorney will schedule a time for you to sign the documentation for your loan.   At settlement you will pay the down payment and closing costs; you will need to bring a money order, as personal checks are not normally accepted.  This is your final opportunity to review the loan documents.  Make sure to check the interest rate, loan term, names, and addresses for accuracy.  Finally, you will sign the documents.  Make sure to bring identification. 

After the paperwork is signed, the documents are sent back to the lender for review and funds are dispersed.  When purchasing, this can take up to an hour.  If you are refinancing, federal law requires a 3 day rescission period after signing the paperwork, after which the funds will be disbursed.