Each Step and Stage takes time. The timing varies depending on the volume flowing through the industry and with each lender and escrow agent during the time of your loan. We will do everything we can to work with the various parties along the way to assure a smooth closing. Your response time with information and documentation needed throughout the process will be a key factor in the successful closing of your purchase transaction.
| Pre-Application | Initial conversation, assess qualification, review loan options, discuss rates/pricing and what to expect. Documentation needed list provided. You gather your documentation for the next step. Generally, the credit report is ordered at this stage. |
| Application Package | Upon receipt of documentation, your loan application package is prepared which consists of the application itself along with numerous State, Federal and Lender Disclosures. You will receive an email from the Lender to esign their Loan Application Package and you will also receive an email from Arboretum Mortgage to esign our Loan Application package. State and Feds require we each do our own. |
| Third Party Set Up | With a Purchase transaction, Escrow and Title companies are generally chosen in advance by the Selling side and are designated on the Purchase & Sale Agreement. We communicate that we are handling the financing and provide our contact information. Escrow will send a welcome letter to you and probably ask you to complete one or more of their forms. We can help with this if need be. The escrow agent will handle the final closing stage. |
| Lender Disclosures | Once the loan is registered in the lender’s system, the lender will email auto-generated disclosures to comply with Federal compliance laws. These are often not State-specific and can contain misc. fees not applicable to your loan. Given these are auto-generated; they may over-estimate fees/costs to protect themselves. You will continue to receive an auto-generated email from the lender throughout the process. |
| Appraisal Order | The appraisal is ordered through the Lender’s Appraisal Management Company (aka AMC). This happens generally after the property inspection takes place to assure the transaction is moving forward. The only up-front cost you will incur is the cost of the appraisal. You will receive an electronic copy of the report once it is available. |
| Initial Underwriting | The full application package is submitted to the lender for Underwriting. The Underwriter reviews the file for general qualification as well as compliance with Fannie Mae/FHA/VA guidelines (as is applicable with your loan) in addition to the overlay of their own guidelines. |
| Conditions | Assuming a loan approval is granted – there will be Conditions that must be met before we can order your closing documents. This is the case with all loans. The ‘Conditions’ are documentation required by the lender to fully comply with Fannie Mae, FHA or VA guidelines. This relates to secondary marketing in the mortgage industry and generally has nothing to do with your ability to qualify for the loan. The lender wants to protect themselves from anything viewed as non-compliant should your file ever be chosen for audit after closing by the lender, investor or future servicing agent. |
| Underwriting Review | When all of the Conditions are gathered, they are sent in for review to determine if they meet the guidelines/criteria. Lenders generally want to receive all at one time. Review of Conditions can prompt additional questions or need for additional documentation. This can lead to an additional review. |
| Final Sign-Off | The Underwriter makes the final determination of what satisfies each Condition. When all of the Conditions have been signed-off, the lender gives us the go-ahead to order your closing documents. Some lenders have a final Quality Control Review (for compliance) at this stage. |
| Closing Doc Prep | The lender’s loan document preparation department prepares your closing document package for escrow. |
| Escrow/Lender Finalize | Upon receipt of the doc package, escrow does their review and final preparation. This includes preparation of the Closing Disclosure (CD) Statement. This is a tally (but still an estimate) of all of the charges and credits involved in the transaction both on the Buyer and Seller side. Federal Law requires the Borrower to review the Closing Disclosure at least 3 business days prior to signing closing documents. Escrow will Prepare a Settlement Statement upon finalizing everything. The bottom line will show the exact amount of cashier’s check (or wire from your account) that will be required at signing. Escrow works with the lender to finalize the numbers. |
| Signing with Escrow | Generally, the escrow companies want to be in receipt of the doc package before they will schedule the signing appointment with you. You may be asked to bring in one or two pieces of photo ID. Buyers meet separately from Sellers. You will meet with your escrow agent at their office or at a Mobile Notary coordinated by escrow can meet at a location of your choosing for the signing of your closing papers. |
| Funding/Closing | The loan will fund and close within 1 to 2 business days after your signing. The ‘funding’ of the money happens mid-day and the recording of the Deed of Trust happens late in the day at the courthouse through the title company. Congratulations! This is the point at which the property is legally yours. Your agent will coordinate handing over the keys and you take it from there! |
| Beyond Closing | Within your closing package, there will be a First Payment Letter/Statement. This provides all of the detail you will need to make your first payment. The lender may not have time for the final input in their system between your closing date and first payment due date. So you may need to make the first payment via mailed check. Beyond that, you will be able to log in to the lender’s website and set up an auto-payment plan if you choose. |
If you have any questions after your closing about your loan or down the road with any future mortgage needs, I am always here to help. Thank you for allowing me to help you through this process. I will be with you each step of the way!
Amy O’Brien | MLO 85346