5 Simple Steps to Loan Closing

After the home you want to purchase is under contract, or you’ve decided to move forward with a refinance, what happens to your loan? I’ve broken the loan process out into 5 simple steps to loan closing. I aim to take the guesswork out of what happens to your loan application when you’re ready to proceed.

5 Simple Steps to Loan Closing

  1. Initial Disclosure Signing: I prepare and have you sign everything I must disclose to you in order to start the loan process. This does not obligate you to accept the loan. We can lock in your interest rate at this time, or wait until a more favorable time. I also collect the documents needed from you to process the loan at this time.
  2. Prepare for Underwriting: Your loan processor  works with me to move your loan through the loan process. S/he will review your loan to check for any missing items we need to request. The processor also orders the appraisal, verification of employment, tax transcripts, and other required items for underwriting.
  3. Initial Underwriting Approval: The underwriter is the person who decides if your loan application meets the guidelines of the agency or investor of the loan. On a conventional loan, that’s Fannie Mae or Freddie Mac. On an FHA loan that’s the Federal Housing Administration, etc. If your application meets guidelines the underwriter will approve your loan with conditions. These are the additional items required to close your loan. Your loan processor or I will request them from you. 
  4. Final Underwriting Approval: When we have your conditions, and the appraisal, back, we can submit for final underwriting approval. At this stage the underwriter says your loan is approved to close. This is also the stage where we must lock your interest rate in. Then we disclose a closing disclosure to you.
  5. Loan Closing: Three days after your closing disclosure goes out, your final loan documents can be signed. This is where you go into your escrow office to sign the ‘big stack’ of final documents, obligating you to the loan. Typically one day after you sign, we fund on the loan. This happens after a review by our funder to ensure everything required is in the loan file. Once we fund, or send the money for your loan to escrow, the deed of trust you signed will be sent to your county for recording. Once recorded, you own the home, or a new lender is on record if you refinanced.

If you have questions about the loan process you can ask me at any time! Quick and clear communication is one of the cornerstones of my business. Watch below for more!



Three Important Truths About Interest Rates

One question clients always want the answer to is “what’s my interest rate?” The answer to that depends on a variety of factors. To help you understand how interest rates work, my latest Mortgage ABC’s video features three important truths about interest rates.

Three Important Truths about Interest Rates

1. Interest rates quoted on the internet do not necessarily reflect “today’s rate” for your loan scenario. They also do not typically disclose the cost for the interest rate advertised, which is often times exorbitant.
2. Interest rates change daily. The interest rate you’re quoted any given day expires that day unless you lock in. Also, you must get lender quotes the same day to compare apples to apples.
3. There is more than one rate option daily. Lenders actually work off of a rate sheet and can offer multiple rate options depending on what you want to pay.

As always, I highly recommend shopping for your lender, instead of your interest rate. A lender that is looking our for your best interests will wait for an opportune time to lock your rate in, and will explain all your options so you can make an informed decision.