Ever wonder why the loan process takes so long? Check out the steps and extensive work that is required during your home loan processing timeline.
This could be taken online, in person, over the phone, or by mail, the new (5) page application is the start to the whole process.
The main information the application is obtaining focuses on official names, addresses, job history, social security numbers, birth dates, and important disclosures about past foreclosures, national origin, and child support. Information used to pull credit is a major part of the application, so past and current credit obligations are not as important as some of the others.
After the credit is pulled, most Loan Professionals will consult with the borrower concerning the results of the credit report and the opportunities available. Most of the time, this conversation is over the phone, sometimes minutes after the initial loan application. Good Loan Professionals will give the (27) other disclosures needed to submit a file to an underwriter at the same time as the Loan Estimate package.
After a property is found, the Loan Professional will finalize the Loan Estimate package and submit the file to a processor. The processor puts all the pieces of the file together and makes sure all the conditions needed by the underwriter are in the file before it goes to the investor.
As mentioned previously, by law, the Loan Professional is required to get the borrower a Loan Estimate which is an Itemization of Amount Financed and closing costs.
The underwriter for the investor reviews the information submitted by the processor and relates it to the rules and guidelines of the product and program selected. After review, typically there are a few further conditions needed to satisfy the ever-changing rules. Most of those conditions can be satisfied by the Processor, but every now and then the borrower needs to be involved. After all conditions have been satisfied, the file goes to the Closing Department.
The Closing Department coordinates with the title company and the lender to get all fees included in the file and issues instructions to the title company. Once the title company creates a Closing Disclosure, they fax it back to the investor for review. Every transaction has two sets of attorneys that review the parts and pieces of the transaction – one from the investor and one from the title company. If anything is found to be incorrect or non-consistent, it must be remedied before the file can close.
Once the file is reviewed and the Closing Disclosure is approved, the documents are sent to the title company for the respective sellers and buyers to sign and get notarized. Typically, the funds for the loan are sent at the same time and are kept in escrow until the transaction is funded.
The buyer will be credited the amount of earnest money submitted at the time of contract toward his/her down payment and/or closing costs. The remainder of the funds due will be in the form of a cashier’s check. The Closing Disclosure will itemize each and every expense and credit for both the buyer and the seller.
Once the closing is completed and everyone involved has signed, then the title company emails the required documents to the investor. Once the investor has approved the signed documents, then a funding number is created. The title company uses that funding number to release the funds in escrow and cut checks to all parties.
This is when the loan is complete, not before!
Typical timeline is 30-60 days to complete the process. But, could be longer if you don’t provide the required items on time.
If you would like to shop some home lenders, check this link out!
The home loan processing timeline is extensive but worth the wait!
Just breathe, have patience , trust the right lender and you will have the new keys to your home before you know it!
If you have any questions, please reach out!
Your High Performance Realtor,