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The loan process
The first step in obtaining a real estate loan is to fill out the loan application. The loan application of is not designed for those merely acquiring about real estate loans, but for those who will follow through and actually borrowed the funds. A borrower must provide personal and financial information when applying for a loan.
During the initial interview, the buyer will learn about the various types of financing programs offered by the lender. These include 30 year fixed mortgage, 15 year fixed mortgage, ARMs and so on. Based on information given by the lender and the buyers own personal circumstances, the buyer will decide which program best suits his or her needs.
2. Analysis of the borrower and the property. Once the application has been properly filled out, the lender can begin gathering other necessary information. Verification forms will be sent out to the buyer's employer, banks or other financial institutions, and any previous mortgage lender. The lender will order a credit report and had a preliminary title report prepared. A credit report verifies the borrowers the credit standing. An unapproved appraiser will be contacted to have an appraisal done on the property. An appraisal provides a professional opinion of the value of the property.
3. Processing of the loan application. When the current report, verification forms, preliminary title report, an appraisal have all been received by the lender, a loan package is put together and submitted to underwriting department. The loan underwriter thoroughly examines the loan package and then make the decision to approve it, rejected come to approve it under certain conditions.
4. Closing the loan after the conditions are met, all the necessary documents are prepared for closing. The closing process only takes about one week if anything goes smoothly. The escrow company simultaneously follows the instruction of both the buyer and seller, and is responsible for providing the lender with a certified copy of the escrow instructions. The escrow agent prepares own necessary documents, such as promissory note, deed of trust, and makes sure that all the documents are properly signed by the parties. The escrow agent calculates the various prorations, adjustments, and charges to be assessed against each party, make sure that will require funds and documents are deposited, and furnishes each party with a closing statement. |