The Loan Application Process

Choose a program (Conventional, FHA, and VA)
When you apply for a loan, you will need to have a program in mind so the lender can prequalify you for a specific interest rate and term. Discuss the different programs with your mortgage loan consultant to determine what is best for you. Picking the Interest Rate Just like choosing a loan program, you need to decide how you want to price your loan when you apply. Many market fluctuations, borrower, and property qualifications influence the price of your loan.

Applying for a Loan
You can apply for a loan after you have already signed a contract to purchase a home or before making an offer, we recommend you have a pre-approved loan before you submit offers.

Getting Pre-Approval
You can be pre-approved for a mortgage before you find the house you want to buy. Getting pre-approved may make you a stronger buyer in the eyes of the seller because the only step remaining in the mortgage process is to have the property appraised. Also, once you are pre-approved you'll know the maximum price you can afford to offer for a house and can enhance your negotiating position with the seller.

Processing the Loan Application
To "process" a loan is to make sure that all of the required documentation has been obtained and checked to ensure the conditions stated in the preliminary approval are met. Once the appraisal, credit report and completed disclosure and documentation package is received, your lender will prepare your loan for submission for final approval.

Final Approval
The underwriter will review and analyze the processed loan package and either approve, deny or suspend your application for a loan. If mortgage insurance is required for your loan, the underwriter will also submit the loan package to a mortgage insurance company for review. In reaching a decision on your application, the underwriter will take into consideration your income, credit, cash reserves and the property itself. The underwriting process usually takes less than two days to complete. Oftentimes, buyers want to be approved before they find a property to buy.

Funding Your Loan
The end of the lending process is usually called "settlement" because that's when everybody "settles up." Loan funds are either wired to an escrow account or the lender sends a cashier's check to the closing agent, Title Company, or escrow agent for disbursement of funds.