Loans In Process

There are 6 data points that the Federal government considers to be a complete application. The data points are your full name, your income and social security number (to obtain a credit report), the property’s address, an estimate of the property’s value and the loan amount. Once these 6 data points are received, loan disclosure laws requires the lender to deliver a Loan Estimate within 3 business days.

A Loan Estimate is a three-page document that tells you the important details about the loan. It will include the estimated interest rate, monthly payment and total closing costs for the loan. The Loan Estimate also includes information about the estimated costs of taxes and insurance, and how the interest rate and payments may change in the future. All lenders are required to use the same Loan Estimate form to make it easy for you to compare loans and select the right one for your situation.

A Loan Estimate is not an approval for your loan application. It shows you what the loan terms are if you decide to move forward with that lender. You will need to provide the lender with additional information before getting an approval.

Conditional Loan Approval a status assigned to applications requring clarification or missing information. It is neither an approval nor a denial. This means the underwriter on your loan has most of the information they need to approve your application. They need a few pending conditions or questions answered before issuing final loan approval.

As a borrower, some common approval condtions are: updated bank statements or paystubs, verification of homeowners insurance, gift letters for home buyers using gift funds or letters of explanations for recent large deposits or withdrawals. This is not an all inclusive list and each loan is different. When Conditional Loan Approval is reached, we will contact you with what items we will need your help with.

Final Loan Approval is when you have met the requirements and conditions to close on your new mortgage. Typically a Closing Disclosure has either already been sent to you or you will be receiving it at Final Loan Approval. A Closing Disclosure or “CD”, is a 5-page document that provides details about your mortgage loan. It includes the loan terms, projected monthly payments and other closing costs. Signing this document does not hold you to the loan but Federal law requires the CD to be signed at least 3 days before signing your loan documents. During the 3 days, the lender and escrow will reconcile all fees and prepare a final CD to be signed at your final loan signing.

After your loan is approved, the lender will start working on your final loan documents. We recommend that you review the documents prior to signing and make sure that the interest rate and loan terms are what you were promised. Also, verify that the name and address on the loan documents are accurate. The signing normally takes place in front of a notary public.

There are also several fees associated with obtaining a mortgage and transferring property ownership which you will be expected to pay at closing. Bring a cashiers check for the down payment and closing costs if required. Personal checks are normally not accepted.

Your loan will normally close shortly after you have signed the loan documents. On owner occupied refinance loan transactions federal law requires that you have 3 days to review the documents before your loan transaction can close.

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