The Loan Process

1. Prequalify

"Prequalification" occurs before the loan process actually begins, and is usually the first step after initial contact is made. In a prequalification, the lender gathers information about the income and debts of the borrower and makes a financial determination about how much house the borrower may be able to afford. Differnet loan programs may lead to different values, depending on whether you are qualified for them, so be sure to get a prequalification for each type of program you are suited for.

2. Application

The "application" is actually the beginning of the loan process and usually occurs between days one and five of the loan. The buyer, sometimes also refferred to as a "borrower" or "applicant", completes a mortgage application with the load officer and supplies all the requiresd documentation for processing. Various fees and down payments are discussed at thsis time and the borrower will receive a Good Faith Estimate (GFE) and a Truth-In-Lending statement (TIL) within three days which itemizes the rates and associated costs for obtaining the loan.

3. Opening the File

This usually occurs between days three and ten. At this time the lender orders property appraisal, property survey and credit reports, mails out requests for verifications, if necessary, for employmen(VOE) and bank deposits (VOD) and any other documents needed for processing of the loan. All information supplied by the borrower is reviewed at this time and a list of items not yet recieved is compiled.

4. Processing

Processing usually occurs between days five and twenty-five. The "processor" reviews the credit reports and verifies the borrower's debts and payment histories as the VODs and VOEs are returned. If there are unacceptable late payments, collections for judgement, etc., a written explanation is required from the borrower. The processor also reviews the appraisal and survey and checks for property issues that may require further discernment. The processor's job is to put together an entire package that may be underwritten by the lender.

5. Underwriting

"Lender underwriting" usually occurs between days fifteen and twenty-five. The underwriter is responsible for determining whether the combined package passed over by the processor meets all the lender's criteria. If more information is needed, the loan is put into "suspense" and the borroweris contacted to supply more documention.

"Mortgage insurance underwriting" occurs when the borrower has less than 20% of the loan amount to put towards a down payment. At this time, the loan is submitted to a private mortgage guaranty insurer, who provides extra insurance to the lender in case of default. As above, if more information is needed the loan ges into suspense. Otherwise it is usually returned back to the mortgage company within 48 hours.

Contact us today to begin your application process.

Want to save even more on your new low rate mortgage?

Click Here to Learn more!

We strive to deliver you the lowest mortgage rate in Rhode Island! Whether or not this is your first mortgage, we work to ensure you get a mortgage that fits your needs.