Don’t Worry, We’ve Got This
Whether online, on the phone, or in person, when you first apply for a
home loan and submit your loan application, the Easterbrook Team will provide
you with a list of items needed to complete your loan file. Your credit report
will be run at this time. In a completed loan application, there is information
provided by you and information provided by third parties. Your paperwork will
include items such as your pay check stubs covering a 30 day period and your
last year’s W2 forms. If you’re self-employed, you can expect to provide the
last two years of both personal and business returns along with a year-to-date
profit and loss statement. Once you submit all of your documentation to
accompany your loan application, it can get a little quiet on your end. But
that doesn’t mean nothing’s happening. Far from it.
The lender then proceeds to order necessary third party documentation.
There are multiple service providers that help complete the loan application so
the loan file can be submitted to the underwriter who ultimately approves the
loan. Your appraisal is ordered. Title insurance is needed so a title insurance
policy is ordered, and so on. You will be provided an estimate of who all these
other people are and what they’re going to charge for their services. Once
completed, the file goes to underwriting.
The underwriter will review the application and determine whether or not
the documents and the application submitted conform to the guidelines included with
the selected loan program. Once the loan meets these guidelines, loan documents
are prepared and sent to your settlement agent. But sometimes, in fact most
times, there will be “loan conditions.”
There are two types of loan conditions, a “prior to document” condition
and “prior to funding” condition. A “prior to doc” condition means the
underwriter needs something else before loan documents can be ordered. This
stops the loan process. But it’s not something to be afraid of. It doesn’t mean
there’s something wrong and you can’t close on your home, but it’s more likely
the file is missing something important. Maybe there’s an old lien on the
property that hasn’t been released or maybe the underwriter wants to see one
more comparable sale in the appraisal.
A prior to funding condition means the loan papers can still be
delivered to the title settlement agent but the lender won’t deliver the funds
for the mortgage until this condition is fulfilled. For example, credit
documents within a loan must be no older than 30 days. That means a pay check
stub submitted might be more than 30 days old and you need to provide a copy of
your latest.
All this paperwork and communication may seem daunting, but on the
Easterbrook Team we do it every day. Don’t
worry, we’ve got this. And as our slogan
says, “We Make the Loan Process Easy”.
