The Mortgage Process: 4 Essential Steps to Closing your Loan on Time

1. Complete Your Mortgage Application

The first step in the mortgage process is to complete a loan application.  If you have any questions with the application, please call your loan officer. Do the best you can, and we will review the application with you by phone to complete anything that may be missing.

It can also be helpful to present the listing agent and seller with a pre-qualification letter from your lender stating you are a qualified buyer when you make an offer on a home.

Once you apply, we will be notified that your application is complete and send all parties on the loan an eConsent for permission to send your documents electronically. The borrower and co-borrower must use a separate email address for loan disclosures to be sent.

We also highly encourage you to upload your credit documents from our checklist so we can let you know exactly how much you can qualify for with little or no margin for error. You will upload your documents to our app.

2. Qualify For A Mortgage

The mortgage qualification process includes:

  • pulling your credit report
  • reviewing a copy of all borrowers’ driver’s licenses and social security cards
  • the most recent two years addresses should be on the application
  • verification of proof of income and proof of employment from the most recent two years
  • two years W2’s and 30 full days paystubs and or two years tax returns if self-employed or contract labor
  • We will verify proof of funds for closing from the most recent two months bank statements on accounts you will be using for closing plus we will look for two months reserves (total monthly mortgage payments) is in the bank after closing on owner occupied properties.

Once your application is complete and you have submitted your credit documents, we will then submit your loan for an automated underwriting approval (this is not the final approval as an underwriter will review your file once you are under contract). This is fast and efficient.

We will then provide you with a pre-qualification letter.  Once you find a home you will attach the pre-qualification letter to your offer.

Once you offer is accepted and you are under contract, we will send you a Loan Estimate to be electronically signed and an Intent to Proceed and loan disclosures.

The earnest money deposit you have placed at the title company with your contract will be credited back to you at closing and will be applied to the cash required for closing. All parties on the loan must have their own email address to electronically sign all documents.

Once your offer is accepted, you will need to shop for Homeowners’ Insurance.  If you would like a referral to insurance companies, please let us know.  We will need your insurance binder for the underwriter to review and to draw closing documents.

We encourage you to get this completed quickly. Please contact your loan processor with the homeowners’ insurance agents name and contact information.

The insurance company will pull your credit and research the property’s value so please be sure to do this as soon as possible so we can be sure to close on-time.

3. Loan Approval, Underwriting & Conditions

Your automated loan approval and credit documents will then be reviewed by an underwriter once you are under contract.

The underwriter will confirm the accuracy of data by reviewing your credit, income and asset documents, contract, title commitment, survey, homeowners’ insurance binder and an appraisal on the property. The underwriter may come back and ask for a few additional items which is common.

Your loan processor will call you to request these conditions to submit to the underwriter for a clear to close. Once we meet the underwriters’ conditions, your loan will then go to the closing department to draw your documents.

These documents then go to the title company and together they will verify final fees and schedule a time for closing.  Your loan officer will review these fees with you prior to closing.

4. Closing Your Mortgage Loan

Once you are under contract and have signed the Intent to Proceed, you will be asked to send money for the cost of an appraisal.

It is critical that you do this the day you receive the request as the appraisal will not be ordered until you have paid for it.

This is the biggest delay on all loans as an appraisal can take two weeks or more to come in depending on the market. The remainder of funds for closing will be paid at closing.  Most title companies, where you close your loan will request that you send a wire from your bank to the title companies bank for the cash required for closing 24 hours prior to closing.

If you are cashing in a 401K or stocks, there are very explicit rules to show proof of receipt of funds for the underwriter so please do not move money or deposit any money other than normal paychecks without first discussing this with your loan officer.

If you will be receiving a gift, there are explicit rules for documentation that will be required so please discuss this with your loan officer up front.

We will review a Closing Disclosure with you a minimum of three days prior to closing that must be signed by all borrowers acknowledging that you have received it. This closing disclosure must be executed by all parties a minimum of three days prior to closing or your closing will be delayed. This is the law.

The title company will then send you the wire instructions for the money you will need to wire to their bank for closing. There may be a small change in the cash required for closing after the first Closing Disclosure is sent.

Your loan officer will review this with you if that happens. Due to an increase of wire fraud, we encourage our customers to call the title company to review the wire instructions for accuracy.

If you need more information, please feel free to reach out, our expert staff would be more than happy to answer any questions you may have.