Loan Process

The loan process when purchasing a home

The loan process can be confusing to new and even seasoned home buyers. Much of what people have experienced in the past influences how they think the loan process works. Depending on who you used for your last home loan, your experience may have been good or bad. The Wendy Thompson Lending Team believes that the loan process should be predictable and painless. The only way for any mortgage company to achieve this is to have a thorough understanding of how the loan process works and to have the right people in the key roles that interact with your loan at various stages of the process.

Prior to the beginning of the loan process, you are going to talk to us and get pre-qualified. This is where the majority of potential loan issues will be identified. After getting pre-qualified, you will get some generic estimates based on a fictitious property, sales price, down payment, etc. The loan officer will give you a lender letter and you will go out with your real estate agent to find a home.

As you are searching for your new home, you should keep the Wendy Thompson Lending Team in the loop. When you narrow down your selection to a couple of homes, we can provide you with revised estimates that are specific to the property you are looking at. We will also be able to advise you and your real estate agent how much you may need to request from the seller in closing costs and prepaid items so that your out-of-pocket cost stays as low as possible.

Once you’ve found a home and you and the seller have agreed on a purchase price, the loan process begins.

Stage 1

Loan Application / Lock your Interest Rate

As soon as you have a specific property address you can get your interest rate locked. You should contact the Wendy Thompson Lending Team as soon as you are officially under contract so that you can get this done. From there you will need to either meet with the Wendy Thompson Lending Team to sign the loan application and disclosures or we can have your loan documents sent to you electronically. If you haven’t already supplied the information below, you will do this at this time.

  • Most recent 2 years W-2’s
  • Most recent 2 years Federal Tax Returns (All Pages)
  • Most recent one month of pay stub(s)
  • Most recent 2 month’s statements for Checking, Savings, and Retirement accounts (All Pages)
  • Copy of your Driver’s license
  • Homeowner’s Insurance Agent’s name/number

Following the receipt of all this supporting documentation and the signed loan package, you loan officer will submit your loan to the underwriting process.

Stage 2

Loan File Setup / Initial Underwriting Approval

Prior to your file being reviewed by an underwriter there are a series of checks and third party verifications that are ordered in loan setup. Your Social Security Number will be verified with the Social Security Administration, your tax returns will be compared to what the IRS has on file, and we will verify your employment directly through your employer. With certain types of loans other verifications will be ordered depending on the program guidelines. We also do a second review of all the documentation provided and see if anything else is needed from you prior to submitting the loan to the underwriter. After all of this has been completed the loan is submitted to the underwriter for review.

The underwriter’s job is to review what has been submitted and ensure that it meets the agency or investor’s loan guidelines. Assuming that your loan does, the underwriter will issue an initial credit approval. This initial credit approval will contain a list of conditions that have to be met in order for the loan to be final approved.

Stage 3

Gathering Conditions / Resubmitting for Final underwriting Approval

You will be contacted by your loan officer or your loan specialist after the initial approval is in. At that point they will have a list of just about everything needed to final approve the loan. They will ask you for these items, and the sooner you return them the sooner the file can be submitted for final approval. Keep in mind that often you will provide documentation (typically asset documentation) that can bring up additional questions and require further documentation.

Once all the documentation has been gathered, the file will be resubmitted to underwriting for final approval. The goal of the Wendy Thompson Team is to only have two submissions to underwriting to get your file final approved.

Stage 4

Loan Figures / Loan Documents / Final Verifications

Once your file is final approved by the underwriter, the first thing that we do is request loan figures from the title company. This enables us to draft a Closing Disclosure (CD, previously known as the HUD Settlement Statement) so that all parties (buyer, seller, and real estate agents) know what the final figures are. At the Wendy Thompson Lending Team we guarantee that we will provide you with your CD at least 3 days before your closing.

Before our company is able to release loan documents to the title company, we have to re-verify that you are employed and also that you have not opened any new loans, credit cards, or other debts. We will verify this again, often 1 day prior to the closing. Once this has been re-verified, we will release the loan documents to the title company.

Stage 5

Loan Closing

This is the exciting part – getting your home! There is not terribly much required from you as a buyer aside from showing up and signing everything. All of the hard work has been done at this point. You will need to wire transfer the amount needed for closing.