voted 'the most complicated part of buying a home,' the loan process is usually the most confusing part (and as far as we are concerned, the most boring part). Here's a guide to understanding the steps involved in the loan process.
1. Personal Data: full names, address, social security numbers of all borrowers going on the loan
2. Income: the amount and source(s) of income for all borrowers
3. Assets: all the assets you'll be using to qualify for the loan such as savings & checking accounts. Retirement accounts, stocks, and other real estate you own will be factored in even if the money in these accounts won't be used for your down payment or closing costs. These are referred to as 'reserves.'
4. Debts & Obligations: information on car loans, credit cards, student loans, monthly rent or mortgage. Basically, the lender is trying to figure out your total monthly payments you have to pay every month.
5. Credit: your credit history (from your credit report) and any explanations for derogatory items that show up.
6. Property information: estimates on the property you wish to buy ( purchase price, and projections for property taxes, insurance, and any other monthly items you'll be required to pay such as HOA fees).
The lender will review your credit report, income, assets, and monthly obligations. During this process, you'll determine how much money you'll need to put down on the new home and clarify any negative or incorrect items on your credit report.
Once we have you 'under contract,' the lender will begin to process your file. At the time, you'll be asked to provide updated bank statements and on the real estate side we will have a home inspection done and then an appraisal. Once the appraisal report is delivered to the lender, the underwriter will review every piece of information collected throughout the process en route to issuing a final loan approval and we wait to hear the magic words "your loan is clear to close."
Once your loan is 'clear to close' we will schedule a day, time, and location for your closing. Prior to closing, we will conduct a final walkthrough to make sure the home is in the condition it should be, and that the seller has removed all their personal belongings (including THEMSELVES!). You'll wire the cash needed to close over to the title company, and we will attend the closing where you will sign the final loan documents and then we will hand you the keys to your new home!
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