Understanding the Lending Process

The borrowing process can be broken down into six phases:

1. Prequalification
2. Pre-approval
3. Property search
4. Submitting your documents
5. Loan approval
6. Closing/Consummation

1. Prequalification – How much can I afford?

A mortgage prequalification helps you better estimate how much home you can finance. If you’re savvy with your finances, there are plenty of online calculators that can help you, and a licensed mortgage loan originator can also help.

2. Pre-approval – Positioning yourself as the perfect buyer

Once you’re ready to actively purchase property/refinance, a mortgage broker/lender can provide you with an actual pre-approval letter you can present with your offers. Pre-approval takes pre-qualification a step further by verifying your financial information to estimate how much you can borrow.

Essentially, this is where you state your income and debt that will be verified once you officially apply for a loan. The milestone of this phase is a pre-approval letter you can use to go shopping

3. Property Search – Zeroing in on the perfect property

Searching for the right property is, hopefully, the funnest part of the process where you get to go shopping for your new home.

In the case of refinancing, you would skip to the next step. The milestone for this process is a signed contract with, hopefully, a closing date in the next 2-6 weeks.

4. Document Collection – Submitting your loan application

Now the work to qualify for your mortgage begins in earnest. You will be assigned a loan processor who will collect and review your documents. During this phase your mortgage loan originator will also be working with you to help ensure all documents are collected and scheduling an appraisal on the property you wish to purchase. The milestone for this phase is sending your loan to underwriting.

5. Loan Approval – Clearing underwriting

Okay, a little more stressful than the document-collection phase because all we can do is wait. Yikes! No reason to stress, we’ve done the work and now your loan is in the best hands to help get you to closing. The milestone for this phase is either an approval for the loan, an approval with contingencies or not being approved.

What does an approval with contingencies mean? It’s not uncommon for there to be additional documentation required, insurance or some type of official certification required to ensure the lender is able to assume the risk of your loan. Regardless of the results, your loan officer will work with you to move forward.

6. Closing/Consummation – Clear to close!

At this point, you can relax and enjoy the excitement of your new home. A team of closing professionals will now prepare all the necessary paperwork and documents needed to close on your new home. Milestone for this phase is receiving your closing documents and going to closing.

Take control of your mortgage

Providing accurate and detailed information related to your loan application, you can have a direct impact on how quickly the underwriting team processes your loan app.

Ready to take the next step? The key to your success is a personalized borrowing plan. Get the information you need to move forward today. Simply email, call or text us to set up a time we can chat. We’re here to help.

Best regards,
Bryan