We are at the final step of the process, closing the transaction. Now that your offer has been accepted the clock is ticking. Your loan officer will be working very closely with you, your realtor and the escrow officer to get your loan submitted, approved and ready for closing. In this post I will discuss the steps associated with the loan process, the home inspection and what to expect at closing.
Submitting the Loan for Underwriting
At this point in the process your loan officer is going to be working quickly to get your loan submitted and approved. While you probably already gave the loan officer proof of your income and assets during the pre-approval process, they will still need you to provide some additional information. If you have not given the loan officer your most recent paystubs or bank statements they will need those. At this point you will also need to get your homeowner's insurance lined up. Once you have chosen the insurance provider the loan officer will need their contact information. The escrow officer &/or realtor will be providing a fully signed copy of the purchase contract and a proof of the good faith deposit. Once the loan officer has all of this information your loan will be submitted for underwriting.
While you are waiting for the underwriter to review your loan submission there will be two different inspections conducted on the property. One is the property inspection itself where they will be looking for potential problems with the home. Things such as termite damage, plumbing issues, structural damage, or any problems that may affect the condition of the property. The second inspection is the appraisal. This appraisal inspection is to determine the market value of the property. The lender uses this inspection to make sure that you are not paying more for the property than what it is worth based on other recent home sales in the area.
By the time the inspections are complete, the loan officer should have your Conditional Loan Approval. This means that the underwriter has reviewed the loan submission and has agreed to provide you the loan as long as you can meet certain conditions. One of those conditions will be a satisfactory appraisal report. Typically the other conditions are things that your loan officer will be able to handle without your help, but in some cases they will need additional documentation from you. It is important that you give the loan officer the requested information as soon as possible to ensure that the loan process does not get drawn out.
Closing the Transaction
By now your property inspection should be complete and hopefully it was satisfactory, if so you will be waiving your inspection contingency. Once the underwriter has reviewed and cleared all of your loan conditions, they will clear the loan file for closing and send the final loan documents to the escrow officer. When both sides are ready an appointment will be made to sit down and sign your closing documents. These will include the mortgage details and the new deed to the home with your name on it. At this time you will also be delivering your down payment to the escrow officer.
Taking Possession of Your New Home!
After you sign everything and deliver your down payment the escrow officer will complete the closing. To do so they must send the signed documents to the lender who in turn will send the funds of the loan to escrow in order to pay the seller, this is called the funding of the loan. Once the loan has funded the new deed is recorded with the county. Once the county has recorded your deed you are now the legal owners of the property and your keys will be ready to pick up!