Overview of the Mortgage Loan Application and Approval Processing

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Quick overview of applying for a mortgage loan:

Loan Application 1 to 2 hours:

  • Loan application and pre-qualification sheet are filled out
  • Obtain all necessary documents: W-2’s, tax returns; bank statements; paycheck stubs.
  • Review loan programs and how rate lock works

Application Processing 10 to 30 days:

1) Set Up

  • Send out missing items request for items not obtained
  • Order title information, credit report, appraisal
  • verification of employment, funds on deposit and landlord

2) Review

  • Review missing items that have been received
  • Confirm information on verification’s and review for any additional requests
  • Review credit report, appraisal and verification’s

3) Workup

  • Review loan package for completeness
  • Prepare loan paperwork
  • Work up forms for the underwriter

Underwriting 2 to 3 days:

Submit completed loan package for approval – Normally 48 hour turn around. The loan is approved or rejected. Loan approval may be with conditions to be met before loan funding

What is loan underwriting?
Mortgage loan underwriting is a process involving the analysis of your income, assets and credit to determine if you meet the requirements for the mortgage product you are applying for. The underwriter also focuses a great deal of attention on the home that is being financed to make sure the value is sufficient, the home is safe and habitable and the title of the property can be transferred without any issues like prior tax liens, judgments or zoning problems.

The foundation of loan underwriting is built on a concept called the 3 C’s of underwriting. The factors are credit reputation, capacity to repay loan and collateral, appraisal value of home + down payment.

Title 1 to 3 days:

  • Draw loan documents and send to escrow/title company
  • Buyer & Seller sign their respective documents
  • Signed documents and funding package sent from escrow/title company to lender
  • Lender reviews package to ensure all conditions have been met

Closing of Escrow:

  • Funds issued to escrow company for disbursement to seller
  • Grant deed and Trust deed are recorded
  • Keys are then given to buyer