When you buy a home there are numerous steps that are necessary to get the loan closed. Typically the loan process takes two weeks, ten business days, from loan application to closing.
PRE PURCHASE: The real estate agent and buyer begin the search for the home. During this time, the buyer SHOULD begin to search for a lender. There are many choices for lenders today. The buyer should get referrals from the real estate agent or other trusted sources.
DAY 1 | Application — The application occurs during the first day. The buyer applies for a loan and thus becomes a "borrower" and completes the loan application with the information that includes employment and income data for the past two years, financial information on assets and liabilities and any other data that could affect the loan decision. All information must be documented and proven. The days of liar loans are over.
DAY 2-3 | Opening the File — The lender orders the property appraisal and credit report. Verifications of employment, rent or mortgage, and deposits (assets) are submitted to the correct institutions. It may take up to one week to receive these documents. The lender submits the loan to an internal or external processor who reviews the file to ensure the appropriate documents are included in the file. These documents include but are not limited to credit reports, verifications of asset, income and appraisal. In addition, debt and payment histories are reviewed and verified.
DAYS 4-6 | Lender Underwriting — Typically the file must be complete before submitting the file to the underwriter. It's the job of the underwriter to review the entire package. The underwriter must determine if the borrower meets the underwriting guidelines of the loan they're matched with. If the loan was submitted through an automated underwriting engine and the loan was approved, underwriting is a minor formality. However, if there are questions, it is extremely important that the borrower to respond immediately. If the loan is denied, there is still time to switch loans and/or investors.
DAYS 6-8 | Pre-closing — There are several steps during pre-closing including ensuring that title insurance is ordered, approval conditions are met, closing is scheduled, borrower selects their home owner’s insurance provider.
DAYS 9-10 | Closing The loan is ready to close. A Housing and Urban Development Settlement Form is sent to all parties (buyer, seller, lender, and real estate agents). It's reviewed by all parties for accuracy. The borrower obtains loan proceeds and presents certified check for balance of down payment and closing costs.
Borrower becomes a home owner moves into the new home.
We've put together several articles to help your home buying process easy at Denver Agent. Our goal is to help you get the Denver Home of your dreams.
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