With proper documentation, most lenders should be able to provide a letter of committment, subject to appraisal, in as little as seven business days. The property must be adequately collateralized to secure the loan once an appraisal is performed. Processors organize your information and may verify your employment status, bank balances and other information from your application. An underwriter reviews all the information in your loan file to determine if the application meets lending guidelines. At this point, the loan is either approved or denied.
Closing is when the ownership of the property is transferred.
All fees are paid, the remainder of the downpayment is remitted, as are closing costs such as title insurance and taxes. The loan for which you apply may not be the loan for which you are ultimately approved. Sometimes a mortgage lender offers a program with different terms or a counter offer. Many of the reasons for denial such as insufficient funds, excessive debt or poor credit history can be improved over time. In addition to federal loan programs like FHA, VA and Farmers Home Program, there are also state programs available to help first-time homebuyers.