What happens during the Loan Processing phase of getting a home loan

Purchasing a home can be a complex process with many steps and turns.

One of the most important phases of the home-buying journey occurs behind the scenes. Your loan officer and underwriters work diligently to fund your loan during processing.

Here’s what it looks like:

Loan approval guidelines vary, but they all follow government standards. The main factor that determines your approval for a loan is your ability to make payments.

During the Loan Processing phase, your loan officer’s team will check for the following:

  • Income.  Confirmation is needed that you’ll be able to afford your payments.
  • Credit Check. A thorough review of your history is in order. This is important as the terms and type of loan you’ll obtain will be determined based on your score.
  • Assets. A final check will ensure that you have the funds to cover closing costs, down payment and other associated expenses.
  • Property Appraisal. A calculation of your soon-to-be home’s value will be needed to determine market value, which is the basis for how much money you’ll borrow.

In some cases, additional documents will be needed. However, you can expedite this process by ensuring the following:

  • Make sure your application is properly filled out.
  • Promptly respond to all correspondence regarding your loan to keep it on track.
  • Do not move money around without a paper trail. You may need to prepare special documentation for any large deposit into your bank account.
  • Refrain from making any large purchases until your loan is closed. Any financial movement can negatively impact your credit, application and ultimately, your loan.
  • Stay in town. You may be needed to sign last-minute paperwork to push your loan across the finish line.

Once the process reaches the end, it’s only the beginning of something new!

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