What happens after the loan application?
We understand that choosing a mortgage is the biggest financial decision of your life, and we’re committed to making the process as seamless, friendly, and financially valuable to you as possible. That said, if you ever feel you’re lost — just contact us!
Here are the six major milestones you'll reach after completing an application and during loan processing and what’s happening at each stage of the process:
1. Relocation Mortgage Consultant submits the application to processing
After an introduction and hand-off, the Loan Specialist collects and verifies all documents necessary to prepare the loan file for underwriting. The documents provide us with everything that we need to know about you (the borrower), and the property you are financing.
2. Loan is submitted to underwriting
The Underwriter begins the loan underwriting process, reviewing all documentation to determine whether you qualify for the mortgage. While the Loan Officer and Relocation Mortgage Consultant will do their best to submit a complete file during loan underwriting, an Underwriter may still have questions and/or require additional documentation to satisfy any conditions for a final approval.
What do underwriters do?
Mortgage Underwriters review financial statements, employment records, housing market reports, home appraisal reports, and other documents to check that you can both afford the home loan you’re applying for, as well as that the home you’re buying provides sufficient collateral for the mortgage.
3. Loan is conditionally approved
If your loan application presents an acceptable level of risk for the underwriting team, then they will grant you conditional loan approval. But you’re not in the clear just yet.
What does conditionally approved mean?
A conditional loan approval means that the underwriter has signed off on the parameters of the loan and most of the documentation, but still needs a few more items before fully approving the borrower for the loan. At this stage in the mortgage process, your loan status is contingent on meeting those final conditions, such as an incoming appraisal.
In most cases, our mortgage team wants to see additional documentation to verify your finances and get a more complete picture of your financial behavior. A best practice is to avoid extra debt (like a new car loan), maintain steady employment and keep a close eye on your streams of income.
4. Loan is clear to close
What does "clear to close" mean?
The term "clear to close" means the Underwriter has signed-off on all documents and issued a final approval. You meet all of your lenders’ requirements to qualify for a mortgage, and your mortgage team has been given the green light to move forward with your home loan.
When you reach this stage of the mortgage process, your lender will send you a clear-to-close letter along with a copy of the initial Closing Disclosure (CD). Please sign and return that immediately. The CD is the standardized document that details the finalized terms for the loan, including a breakdown of all closing costs and fees. You won’t receive the final Closing Disclosure until days prior closing.
You’re almost there, but there’s still work to be done behind the scenes: The lender will schedule your closing and review the CD to ensure every cost and contingency has been incorporated before heading to the closing table.
Closing processes vary slightly depending on the type of transaction, as well as local, state, and municipal laws. Also, be sure to check with us for a list of what you will need to bring to the closing table, such as your photo ID, payment for closing costs, etc.
6. Loan has been funded
The final step on the loan process is now complete: Your loan has been funded! At this time, all documentation is complete and the funds for the loan have been disbursed to the seller (for purchase) or to the payoff of the prior loan (for refinance).
You should receive your first payment statement at the closing. This should be used to make the first and possibly second loan payment. If you did not receive the statement or cannot find it, you can reach out to your Mortgage Professional for a copy.
Hopefully, this breakdown helps you understand the inner workings of the mortgage process. Don’t hesitate to contact us with your specific questions along the way. We’re here to simplify a complex process and to provide the kind of personal service and advice you deserve.
In short, we’re here to get you home.