subject: How The Loan Process Works [print this page] Purchasing real estate is undoubtedly probably the most stressful, exciting and confusing dealings you will ever undertake. Even if you are not new to it you can still find it complex and frightening, especially when it comes to getting a mortgage. Starting with all the countless loan documents, unfamiliar terminology and uncertainty, it all serves to hold back the thrill of buying a brand new house. I always suggest that a buyer become pre-approved for financing before starting a property search as compared with afterwards. The obvious reason being that you'll know exactly just how much house you're able to afford and narrow your search to those homes. It also gives you a slight advantage when it comes time to making an offer on the home of your choice! If you choose to do it the other way around, once the sales contract is signed, getting the financing for the purchase becomes vital for all but a few buyers. If you realize the steps necessary to qualify for a mortgage however, a lot of the strain could be avoided.
First and foremost is selecting a lender that you can trust will help you with the complete process and ultimately find the very best deal on financing for you based on your specific qualifications. Most Real estate agents have a lender or two they recommend to assist you to get pre-qualified that they trust and have had great experiences with. Do not be scared to ask for a recommendation.
To get started you have to collect some documentation that will need to be provided with your loan application. Here is a listing of what you will need:
Two years W-2?s,
1 month current paystubs
Tax Returns if Self-Employed
Contact information for Human Resources where you work
2 months Bank Statements
Latest 401 K or investment statement
Value of other assets - cars, boats, etc.
The last Property Tax Bill
The application alone could be a tad confusing for some people and the majority of lenders are going to be happy to help you with the process of filling it out correctly.
Processing typically requires one to three business days. That's when the mortgage loan professional reviews the application to make sure that it paints an truthful image of your financial situation and is the internal step of submitting your application to the underwriter of the bank which will (hopefully) approve your mortgage loan.
Chances are you'll receive a telephone call during this time for further information. This is not a sign that there is any trouble with your application. In fact, this can be an indication that you have a professional that wants everything just right to make the remainder of the process go faster.
Next is sending your application and supporting documents to underwriting. Underwriting is where the underwriter looks at the picture your mortgage banker has painted and decides whether this loan makes sense. The underwriter makes the choice regarding whether or not your application is approved.
You could receive a phone call from the lender regarding some underwriter conditions that should be met before the can approve the loan. When your mortgage banker tells you there are conditions to clear and asks for something, do not delay. This stage is where most loans are delayed. Many times, this is due to the companies that the information need to be retrieved from. It is very important for you to keep on top of this part to satisfy what is required to obtain your final approval so you can close on your house.
Hopefully this has given you a clearly sufficient depiction of the mortgage loan application procedure.
