Steps To Get A Loan
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8 typical steps lenders use to approve and fund a loan.
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You |
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Lender |
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You complete and submit your loan application. |
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Lender reviews your information and contacts you about your loan. Depending on the loan type, you can lock your rate at this time. Then, lender sends you a loan application to sign. |
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You return your signed application and required supporting documents to lender. |
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Lender orders an appraisal for refinance and purchase loans now. |
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If you haven't already done so, you can request to lock a rate anytime after lender receives your signed documents. |
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Lender reviews your application and supporting documents, assembles everything into a "loan package," then sends it to underwriting for approval. |
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Three possible outcomes of lender review: |
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Loan approved Go to step 6. |
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Loan approved with conditions
Lender helps you meet the conditions and then resubmit. |
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Loan denied
Lender submits your loan package to another lender and/or discuss other options. |
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Lender coordinates the timing of your closing with you and your settlement agent. |
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You sign your final loan documents on (or before) the closing date. |
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The lender wires your loan amount to your settlement agent. |
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1 day +
This step can take 1 day or longer, depending on you. You'll need to gather the required documents, such as your pay stub, W-2 and bank statements, make copies and then mail the originals with your signed application in the envelope that the lender provides.
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Step #4
2 - 4 days
During this time, lender orders your title insurance and confirm that you meet underwriting guidelines for the mortgage you want. If you don't qualify, the lender will help you find a similar mortgage that fits your needs. The lender may also request additional supporting documents, such as 401k statements.
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Step #5
2 days to several weeks
The total time to complete this step depends on the lender, and on you. Normally, the lender takes from 3 to 7 business days to review your package and make a decision on your loan. If your loan is approved with conditions, it may take some time to meet all the lender's requirements.
The sooner you provide the lender with the required documents, the sooner the lender can send them to the underwriter to clear any conditions for the loan's approval. The underwriter then gives their final decision within 2 to 3 days.
Standard lender conditions include:
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- Clear title (ownership) to the property
A title insurance company will conduct a title search to make sure that the seller actually owns the property that you're about to buy. Also, the seller must pay off any claim or lien placed on the property by a creditor.
- A signed loan application (1003) reflecting the final terms of the loan
- An appraisal that supports your property's value
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