Steps to Approval
Loan approvals can happen much more quickly today than in the past. The ability to do more and more work utilizing computers and the Internet has enabled the mortgage industry to expedite the processing of loans. Even with new and improved systems and methods for loan processing and approval, the following steps must be completed:
- Formal loan application must be made with your loan officer. This is the beginning of a positive loan experience. The better prepared you are to give your loan officer all the necessary information required for the loan application, the smoother the loan processing will go. To make sure you understand what will be required of you during a formal loan application,
- Required documentation is collected or ordered by the loan processor. Your loan officer or the loan processor will order a credit report, appraisal and other necessary documents required for your particular loan. These may include such things as VOE (Verification of Employment), VOR (Verification of Rent), etc. Required documentation will depend on your particular situation and the loan program you and your loan officer choose.
- The processor submits the loan for underwriting review. This submission is usually handled through one of the automated underwriting programs now available to mortgage lenders. In most cases, the loan is approved in a matter of hours from the time of submission. After the loan has been approved and any conditions for the approval have been satisfied, the loan is reviewed once more by an underwriter who verifies that the electronic submission was accurate and that all conditions have been met. Once this is completed, the loan has reached final approval.
- Closing documents are prepared. The closing documents are prepared by our closing department in coordination with the settlement attorney. An Initial Closing Disclosure (CD) must either be mailed 7 days prior to closing received and signed for 3 days prior to closing.
- Settlement and funds disbursement. Both parties involved in the transaction must sign all the necessary documents to finalize the deal. Once this takes place, the funds are dispersed to the selling party to satisfy the sale (except in the case of a refinance, where there is a 3-day right of rescission period before funds can be dispersed).
- Recordation of the transaction. The settlement attorney notifies all appropriate authorities that there has been a settlement on your property and that a note and deed have been executed. These documents serve as security for the lender for the mortgaged property.
- Payments are made. You will receive information from the lender either at settlement or shortly thereafter outlining the ways in which you may make payments on your loan. Alternatives include via a payment coupon book, monthly billing statement, or through automatic withdrawal from your bank account.