The Mortgage Loan Process

Your original application was probably submitted through an automated system that gave us statements about your loan approval.  We have collected documents and letters to answer any questions that may be noted on that original automated approval.  

Once an Underwriter reviews our submissions they will respond to us with questions to clarify certain issues that seem unclear.  For instance, if your pay stub shows that you have child support deduction, we will be asked for your divorce decree.  Sometimes we miss something that will be needed, and it is asked for at this time.  Sometimes an Underwriter will want more clarification on an item when we believe we have already made it very clear.  This can be a frustrating time for you.  We will ask you to help us supply more documentation to remove any question of accuracy. 

An Underwriter will review your file.  This person specializes in “compliance”.  They will verify all the information that we have sent in such as income, cash on hand, pension fund, debts. 

Some of the things done in “underwriting”:

1)      They make sure that we have calculated your monthly income correctly.

2)      They verify that your savings and checking were properly stated on your application.

3)      They verify your retirement account was properly stated on your application.

4)      They verify your debts and monthly payments.

5)      They review your appraisal.

6)      They verify inaccuracies on your credit report.

When the Underwriter is satisfied that we have clearly demonstrated we have met the requirements of the original automated decision, your loan will be “clear to close”.

Once your loan is cleared to close, we will request documents to be drawn and order funds.  The time frame varies from Lender to Lender and is different at different times of the year depending on holidays or the volume of loans in their system.  We will be able to more accurately give you a time frame when we are clear to close your loan, but you should anticipate 3 days.  Don’t forget that on a purchase, we must also co-ordinate a closing time with your Realtors and Seller. 

On purchases, it is perceived that the closing is “SET” and that is when it will be, period.  However, unless we have satisfied all of the Underwriters questions, we may not be able to meet a deadline that has been set and an extension of the contract may be necessary.  This does not happen frequently, but is also not unusual; so don’t be alarmed if this becomes necessary. 

Reasons for delays in your file:

1)      There was a delay in receiving your signed disclosures.

2)      There was a delay in receiving your signed purchase contract.

3)      There was a delay in receiving your original appraisal.

4)      Clarifications were needed from your Appraiser concerning your appraisal.

5)      There was a delay in receiving documents.  For instance, divorce decree, bankruptcy papers, income documents, retirement programs.

6)      The volume of loans in the system.  They are just people too, and the refinance boom has put a strain on the system.

The biggest complaint I hear from customers about their buying experience is that they kept being asked for more things, when they thought they had already given the loan officer EVERYTHING they asked for.  I hope this explanation of the process helps you understand why that may happen and helps to put you at ease if we come to you later and ask for more items.