Young Kwon
RMLO, NMLS#304049
young@genesishomeloan.com
Direct 281-989-3098
Mortgage Loan Approval Process Explained: The 5 Steps to Closing
Step 1: Mortgage Pre-Approval
You can think of pre-approval as a kind of financial pre-screening. It happens on the front end of the mortgage loan approval process before you start shopping for a home. When you provide the income, asset, and credit information, you will get a letter stating how much you can afford.
Step 2: Find a House and Purchase Agreement
With a pre-approval letter handy, you can submit an offer when you find a house you like. Once you have a fully executed purchase agreement, we can start the loan processing.
Step 3: Collecting the Loan Documents and filling out Mortgage Loan Application
We will send you the loan application and the document list. Send back the signed loan application and the requested documents.
Step 4: Mortgage Loan Processing steps and Underwriting
1. After receiving the signed loan application, we will register your loan with a lender.
2. Your loan can be locked at this point or you watch the market for a better rate.
3. You will get a welcome email from the lender. The email has documents for you to e-sign and consent. The documents include LE(loan estimates) and other disclosures.
4. Once you complete signing and consenting the documents from the lender, we will submit your loan package to the lender.
5. The underwriter reviews your file and will give 'conditional loan approval' if the loan is doable.
6. The conditions you need to satisfy might include, an appraisal report, title work, supporting income and asset docs, a survey, and others.
7. An appraisal report will be ordered by us, but the upfront fee will be paid by you.
Step 5: Final Loan Approval And Closing
After satisfying all conditions from the underwriter, you will receive 'final loan approval' or
CTC( clear to close) from the lender.
The lender will email the initial Closing Disclosure(CD) at least 3 days before the closing.
The CD lists all expenses you pay for the transaction. You should e-sign the receipt for it promptly, otherwise, the closing could be delayed. You should get the final CD before closing for your review.
You will usually sign the closing documents at the title company. Once the lender receives the signed documents and a copy of the check, the lender will send the fund to the title company. Now, the transaction is closed.