Throughout the homebuying process, borrowers often have questions about the closing process for their home loan. There are quite a few steps to this process, and we understand that it can lead to confusion and frustration if buyers are unaware of the process. To help alleviate some of the confusion, we’ve outlined the closing process in five easy steps so that borrowers know what is required in order to close their loan.
Step 1: Entering Contract
Your Mortgage Analyst will introduce you to the Contract Desk Manager, who will guide you through the following tasks:
- Locking in your interest rate
- Collecting documents for updating your file for Underwriting
- Signing initial loan disclosures
While this is happening, our team is also working behind the scenes with your Realtor and escrow officers to confirm the transaction dates, fees, and terms. Our Appraisal Manager will also go ahead and order your appraisal to have the appraisal report back with plenty of time for the transaction.
Step 2: Submitting Your Loan To Underwriting
The Contract Desk Manager will introduce you to your Closing Specialist, who will be with you until your loan is funded. Your Closing Specialist may ask for updated documents, so prepare to send any necessary documentation so as not to delay the transaction. At this time, you’ll also need to select a home insurance provider and contact your insurance agent to finalize coverage options. It’s also essential to reach to your banks to discuss the timeline for transferring any funds drawn from retirement or need to be liquidated.
Step 3: Appraisal And Formal Loan Approval
The Appraisal Manager reviews and sends out your appraisal report (which you’ll get a copy of). We’ll also receive the formal loan approval and loan conditions from the underwriter at this step. Your Closing Specialist will request all conditions needed from you, so be on the lookout to gather and return condition requests as soon as possible.
Our team also will be in communication with all third parties to complete any additional conditions required. Often this involves coordinating with your escrow team, realtor, and appraiser, in addition to obtaining a verification of employment from your employer. Your Closing Specialist will work on clearing these internal items on your behalf.
Step 4: Final Loan Approval
Your Closing Specialist passes on the conditions you submitted to the underwriter who “clears” your loan for closing. Our team will also obtain all the items from escrow and your realtor needed to draw up your Closing Disclosures (CD) and set of loan documents. Once you electronically sign your CD, there is a three-day waiting period that is legally required before you can sign your loan documents. During this waiting period, we recommend checking that your assets are ready to be sent to escrow.
Step 5: Signing, Funding, Recording
As soon as we have the final loan approval and the required waiting period is up, the escrow officer or your real estate agent will set up a signing appointment. Your final loan docs need to be signed with a notary. We recommend that you send your funds to close to escrow at least one day prior to the day that you sign your loan docs. On the morning of funding, which may or may not be the same day as both parties’ closing, the funder wires the loan proceeds to the title company. Afterward, the escrow officer will record your transaction with the county, which can be done either the same day as funding or the next day.
As always, our Super Team is happy to answer any specific question you may have about the homebuying and closing process. Don’t hesitate to reach out. Our team is available 7 days a week by phone and email.