The mortgage loan process always begins with pre-approval, a crucial step where the lender reviews your financial information, including income, assets, and credit history, to determine a preliminary maximum loan amount. Because this step reviews your financial situation and determines what you can afford, it always must be done before seeking a real estate agent, REA.
The resulting pre-approval letter that you bring to the REA will be used by the REA to demonstrate to the sellers that you are a serious and qualified buyer. Once your offer is accepted and you have a signed Purchase Agreement on a home, the loan goes to processing.
The processor will issue and collect documents to and from you. Underwriting is the phase where a thorough assessment is completed verifying all of your submitted information. A home appraisal will be ordered and a title search is conducted. When underwriting is satisfied with all the documentation and reports, you’ll receive conditional approval first, and soon after that a “Clear to Close” notification is issued which means your loan is ready for the final step.
The process culminates in the closing, which is the final legal transfer of the property. This is where you, the buyer, meet with the seller and other parties involved to sign all the necessary documents, including the closing disclosure. You’ll get a copy of the closing disclosure three days before closing to allow time to review. Once all the documents are signed and the money is exchanged, the deed is recorded, you’ve officially become the homeowner. Congratulations!
