How It Works The Home Loan Process
If you are ready to purchase a home, preparing for your first refinance, or just interested in how the home loan process works, this section is for you. Simply click on ‘+’ button next to each step listed below to see what to expect during each phase of the home loan process. Del Financial can close loans in as little as 10 days, but to be prudent, you should allow for 30-45 days.
-
Step 1. Consultation & Application
Before we begin, you need to understand that the loan process is flexible. Even though there are many items to complete, we are able to carefully adapt the process to your situation. You can trust that our mortgage professionals will guide you through the loan process in a way that is most beneficial for you.
Now, the first step in the loan process is to speak with one of our licensed mortgage professionals. During this first telephone conversation, we will collect the information necessary to:
- Help you determine your borrowing limits (e.g. loan amounts, maximum monthly payments).
- Help you identify the best loan programs that meet your needs while staying within your borrowing limits.
- Provide you with a detailed quote.
Seeing as how every situation is different, the process will not be the same for everyone. Like we said, it’s flexible. However, you will gain the most benefit (and save time) during the consultation period by collecting the information listed on our Checklist of Items Needed prior to the consultation.
Once you receive your quote, your licesned mortgage professional will explain each line item and make sure you understand what each fee covers.
Note: If you are shopping around with multiple lending sources, you must compare quotes from the same day if you want to compare apples to apples. This is due to the fact that interest rates and pricing change on a daily basis.
After you have decided which loan program you want, it is time to complete the loan application. In many cases, most of the information needed for the loan application will have already been collected during the initial consultation process. Your mortgage consultant will then submit your loan application through one of our automated underwriting systems (AUS) to receive a Fannie Mae®, Freddie Mac®, or lender-specific conditional loan approval. If the file has questionable aspects that may prevent approval, we will not issue a pre-approval letter or move on to the next step until the file has been reviewed by an actual underwriter and/or received an approval through our AUS.
If you are purchasing a home, and it has been determined that your file (credit, income, and assets) meets all program guidelines, your mortgage consultant will issue a Pre-Approval Letter and email you a copy. This letter is provided so that sellers know that you have already arranged financing, and that you will be able to close quickly.
Note: Although a Pre-Approval certification is a strong indicator of a buyer’s ability to obtain financing, a Pre-Approval Letter is not a commitment to lend; the underwriter will have the final approval authority.
Once eligibility has been determined, your mortgage consultant will give you the choice to lock your interest rate. Locking the interest rate secures the rate you requested as long as the loan receives a final approval from the underwriter and it closes within the lock period. Lock periods range from as little as seven (7) days to 6 months. Your mortgage consultant will help you determine if you should lock your interest rate and for how long a period the lock should be.
-
Step 2. Processing
Once you have applied for the loan and your mortgage consultant has determined that you meet program guidelines (i.e. we received an automated approval), your loan will be submitted to processing. Within 24 hours of your loan being submitted to processing, a Welcome Package will be mailed and/or emailed to your preferred mailing address. (We are unable to mail to PO boxes. We will use FedEx® to deliver any packages if there is no mail box.)
The Welcome Package will contain:
- Your welcome Letter.
- A list of any outstanding documentation still needed to process your loan application.
- All Federal, State, and Company specific notices, disclosures, and loan documents (e.g. Good Faith Estimate, Truth In Lending, Loan Application.)
- A Pre-paid FedEx envelope for returning the signed disclosures and requested documentation.
- A Borrower’s copy package (i.e. A copy of all the documents for your records.)
Note: Returning the signed disclosures and requested documentation immediately is imperative. Failure to do return disclosures or requested documentation (at any time during the loan process) may cause your loan to be denied.
We will then order any certifications, verifications, or 3rd-party agreements necessary to close your loan. An appraisal of the subject property will be ordered at this point. We will then open up escrow and order a preliminary title report from the escrow and title company of your choice, or if you prefer, we will use one of our Preferred Service Providers. (If this is a purchase, the listing agent will most likely want to pick the Closing Agent and Title Company.) Please let us know if you have a preference for a title company or escrow company. Once we receive the appraisal, signed disclosures, and the other documentation needed, the loan package will be sent to underwriting for verification.
-
Step 3. Underwriting
Once your file has been submited to underwriting, an underwriter will be reviewing the loan application and all submitted documentation for accuracy. The underwriter ensures that the loan file (e.g. loan application, credit history, income, assets, and collateral) meets all loan guidelines and will look for any signs of fraud, default risk, or insufficient collateral. After this detailed review, the underwriter will either: deny the loan, suspend the loan, issue a loan approval, or issue a conditional loan approval. A conditional loan approval will contain a list of requirements or conditions that must be met before a loan approval is issued.
Note: It is very important to return all requested documentation as soon as possible. Returning 9 out of 10 items requested will still leave the file in an incomplete status. Unless all items are provided, your loan will not move out of underwriting.
Once all of the outstanding conditions have been signed off by an underwriter your file is approved. We now refer to your file as ‘clear to close’. Your mortgage consultant and dedicated loan processor will keep you updated throughout this entire process.
-
Step 4. Closing
This is the final stage in the home loan process. Once your file is clear to close, your mortgage consultant will contact you and send you a copy of the estimated final closing statement (Estimated HUD-1) for you to review. This document is a detailed breakdown of all closing costs associated with the loan, any credits, and the final loan amount. Your mortgage consultant will then help you pick a time and place to sign loan documents. A mobile notary (who specializes in loan closings) will then meet you at the time and place you specify, and will notarize key documents. It is recommended that you pick a time during our normal business hours to sign loan documents so that your mortgage consultant can be available for any questions you may have. The notary will then deliver the signed loan documents to the closing agent. The closing agent then helps facilitate the funding of the loan and the disbursement of funds.
After your loan is closed, we will send you a closing package with a copy of your appraisal, note, deed of trust, and the final HUD-1. Please keep these documents for your records.
One last thing... It’s very important to us that we receive any feedback about your experience going through the home loan process with Del Financial. We are always striving for perfection and looking for new ways we can save you time and money on your new home loan. Please click the 'Feedback' link at the top of the page.