Milestones of the Loan Process

This is Derek with the McGowan Mortgage Team and in this video I'm going to share the milestones of the loan process. Getting started on a home loan may seem overwhelming, but when you understand the steps in the process, you'll be able to move through the transaction easier. Let's look at the steps in the process, beginning with identifying your needs. Ask Questions. A good lender will ask you several questions to uncover your needs before jumping into quoting you the day's interest rate. This will ensure that the loan program is the best for you and your needs before you get quoted an interest rate. Each loan program has its benefits and depending upon how much you bring in for a down payment, what your credit score is, and what your debt to income ratio is. Your lender will ask questions to identify the best option cost estimate. You should receive a non binding pre application cost estimate for different loan scenarios. These are provided based on your credit score and an estimated valuation of the property. Your final prices will be based on your confirmed credit score, acceptable property valuation, selected loan program, and market pricing as of the day. At the time that you request a rate lock documentation, your lender will work to take a complete application. They'll ask you for your income documentation, bank statements, possibly tax returns. It's important to provide them with all documentation as quickly and efficiently as possible. This will help expedite the process. The Loan Estimate. Your lender will send you disclosures. This is different from your original loan estimate and will include all the fees associated with your loan. This is called the loan estimate and it is just that, an estimate of your loan cost. These costs may change throughout the process based upon when you lock your loan and the value of your home, which will be determined once you have your appraisal. Intent to Proceed. After reviewing your options and addressing any questions, you'll make a decision and notify your lender that you are ready to move forward with that loan application. This is called your intent to proceed. Your lender may charge you an upfront fee. We don't, but some do. Appraisal Once you have given your intent to proceed, your lender will order your appraisal. Your appraisal will give you the value of your home based upon the appraiser's assessment. Underwriting Once you've submitted all of your documentation and your appraisal is completed, your loan file will be reviewed by an underwriter. The underwriter may come back and ask for additional information to answer any questions that they may have during the underwriting process. As they review. Your lender will notify you of any additional documentation needed. Again, it's important to provide this information to them in a timely fashion. Rate lock. You may lock your interest rate at many different stages in the loan process. I specialize in helping this we monitor the market to make sure it's the best time, the best day for you and your loan. Generally this is done right. When you do the intent to proceed that way, there's no guessing game. There's no question marks on what your interest rate is. We play it safe but very logical in how we monitor the market for that. The interest rate also will be locked through the closing day. That way there's again no questions, no confusing when you get to Closing Clear to Close Once your loan has its final approval from the underwriter and all conditions are cleared, you will receive the great words Clear to close from your lender. They'll send you information that you need to follow that will include how to acknowledge your closing disclosure and how to close your loan. The Closing Disclosure. Just as you received your loan estimate at the beginning of the process, you will receive your final disclosures that are called the closing disclosure. The closing disclosure will show all of your costs on your loan. You can compare the cost and the closing disclosure with the cost on your loan estimate. The cost should be relatively the same. If there are changes during the process, you will have received an updated loan estimate reflecting those changes so you know as the loan moves along. If you have any questions about this, that's when you contact your lender. We'll go over it. Signing Signing. Your commitment to the home loan happens with the settlement agent or attorney or title company, depending upon your state requirements. The settlement agent coordinates with the lender, the borrower, the buyer's agent, the seller, the seller's agent, and the seller's lender in a purchase transaction to review all closing costs and provide the final closing disclosures. Verify all the information, sign the closing documents and when approved, they disperse the funds for closing. Once all is complete, your transaction is finalized. Most loans across the country take about 30 to 45 days from start to finish. We certainly try to move much, much quicker than that, but if you have any questions, make sure to get those answered by your trusted lender. Thanks for watching. This is Derek McGowan with McGowan Mortgages.