Mortgage - Home Loan Application
The beginning of the loan process is actually when you "apply."  Application usually occurs between days 1 and 5 of the loan. As the buyer, you are now referred to as a "borrower." You complete a mortgage application with your loan officer, and you supply all of the required documentation for processing. You discuss points, various fees and down payments at this time and  will receive a Good Faith Estimate (GFE) and a Truth-In-Lending statement (TIL), which itemizes the rates and associated costs for obtaining your loan.

Mortgage - Home Loan Pre-Approval
Once you have applied, your lender will submit your file for automated underwriting. The automated underwriting system reviews your credit scores, assets, income, liabilities, loan-to-value ratios, and your proposed loan details. The underwriting system will then deny or approve within 1 to 3 days of your submission.

Mortgage - Home Loan Processing
Between days 3 and 15 of your loan application period, "processing" begins. At this time your lender orders a property appraisal, orders title insurance. Also, if necessary,your loan officer mails out requests for verifications for employment (VOE), bank deposits (VOD), and any other documents he/she needs for processing your loan. All information supplied by you, the borrower, is reviewed at this time and a list of not-yet-received items is compiled. The "processor" reviews the credit reports and verifies your debts and payment histories as the VODs and VOEs are returned. If there are collections for judgment, unacceptable late payments, child support issues, etc., you are required to submit a written explanation. The processor also reviews the appraisal and survey and checks for property issues, the time to get a home inspection, that may require further understanding. Your processor's job is to put together an entire package that the lender could underwrite.

Mortgage - Home Loan Underwriting
"Lender underwriting" occurs between days 15 and 25. An underwriter is responsible to determine whether the combined package passed over by the processor is deemed to be an acceptable loan. If you need to submit more information, the loan is put into "suspense" and you, the borrower, are contacted to supply more documentation.

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

The Closing
"Closing" usually occurs between days 25 and 45 of the loan process. At closing, the lender "funds" to the selling party the loan with a cashier's check, a draft, or a wire in exchange for the title to the property. This is the point at which you, the borrower, complete the loan process and actually buy your house. Closings occur at different agencies in different states. For instance, some states require closings occur at a closing attorney's office; other states use a Title or Escrow agency.

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Taunya Fagan Bozeman Real Estate   406.579.9683   taunya.fagan@prumt.com