Pre-qualification is the first step in the loan process. In a pre-qualification, bank mortgage lender gathers information about the borrower and makes a financial determination about the house price you can afford. Different loan programs may lead to different values. It depends on whether you are qualified for programs. So, be sure to get a pre-qualification for each type of mortgage plan you are suited for.
Application is the next step of the loan process. With the help of loan officer, the borrower needs to provide the required documents and complete the application process. Various fees and down payments will be discussed. Application occurs days 1-5 of the loan process.
3. Open the File
Lender will order a property appraisal, property survey and credit reports, mail out requests for verifications, for employment (VOE) and bank deposits (VOD) and any other documents needed for processing the loan. All information supplied by the borrower is private, secure and reviewed. Opening the file occurs days 3-10 of the loan process.
The person who processes the file will review the credit reports and verifies the borrower's debts and payment histories. If there are unacceptable late payments, collections for judgment, etc., borrower needs to provide a written explanation. The processor also reviews the appraisal and survey and checks for property issues that may require further discernment. The processor's job is to put together an entire package that may be underwritten by bank lending officer. Processing occurs days 5-15 of the loan process.
The underwriter determines whether the processor passes the combined package and whether the application is deemed as an acceptable loan. If more information is needed, the loan is put into "suspense" status and the borrower will be contacted to supply more relevant documentations. Underwriting occurs days 15-25 of the loan process.
The lender funds the loan to the borrower. This means that the borrower finishes the loan process and actually buys the house. The closing occurs days 25-30 of the loan process.