Home Loan Processing

At this point you are under contract on the home you want to purchase and it’s time to start processing the loan. You will sign a purchase agreement between you and the seller on the terms and conditions of purchasing the home. After that you will deliver an earnest money check to the title company. The earnest money check acts as a deposit on the home and helps fund your down payment. This process is known as escrow, when a third party holds on to the money, protecting both the buyer and seller on the purchase. Once you have provided the fully executed purchase contract to your loan officer for the house you want to buy, your mortgage lender will prepare both the loan estimate and the initial loan application documents.

The loan estimate is a 3 page document containing information about the loan amount, interest rate, how the loan will be repaid, and the closing costs. Before it can go to underwriting (next stage) the loan processor will review the file and may ask you for additional mortgage documentation to verify your ability to repay the loan.

If the loan you are applying for requires mortgage insurance, this is when the loan processor will order the mortgage insurance. VA Loans and Conventional Loans with a 20% down payment are not required to have mortgage insurance. Next the title work is ordered, an appraisal for the property is obtained, and the complete package is sent to underwriting for loan approval.

Check List:
Sign the Purchase Agreement.
Deliver your earnest money check to the title company
Provide mortgage documentation to the processor.
Read through the Loan Estimate and application so that you understand what you are signing.