The Home Loan Process


The Home Loan Process

The mortgage process involves creating, documenting, structuring a loan package, and presenting the file to a decision-maker who ultimately will approve, deny, or suspend the loan. Loans with obstacles are generally not denied, but they are rather suspended for reasons such as the borrower’s debt-to-income ratio being too high, having a previous foreclosure, or many other possibilities. A suspended loan is a need for more documentation or clarification of a specific problem. If the problem can be corrected the loan can still move forward. Here is the loan flow:

Loan package submitted to underwriting

Loan approved with conditions

Conditions come in from borrower & resubmitted back to underwriting

More conditions added or loan is final approved

Final approval/Clear to close

Docs ordered

Sign docs

Fund & record

Once your lender submits your loan to underwriting, “prior to doc” conditions are created. These conditions require more administrative paperwork from the borrower in order to get final loan approval (i.e., the green light for closing). This might mean providing additional pay stubs, additional bank statements, a profit and loss statement showing the income consistent with the tax returns, or addressing questions underwriting might have regarding your financial documentation.



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