You Have a Contract ... Now What?

Posted by:  Service First
2018-05-11 10:22:25

What To Expect During Closing

You Have a Contract ... Now What?

You've found a great Loan Officer and have chosen a Realtor® to help you, turned in all the necessary paperwork, and have found a house in the perfect neighborhood. Only thing left to do is wait to move in.
Not so fast!
Once you find the home of your dreams and have a contract in place, there’s still lot that takes place during the loan process. Don’t let it overwhelm you!  Let’s take a close look at the process so you understand what happens each step of the way.  

What are Loan Disclosures?

Now that you have a contract, a detailed loan disclosure package will be securely mailed over to you for review. This loan disclosure package will break down all of the fine-print details of the mortgage you have selected (for example, whether or not is a fixed-rate mortgage, whether there are prepayment penalties or if there are adjustable features). It also breaks down all of the costs and down payment associated with your mortgage program. Once you have reviewed, signed and returned your loan disclosures, your file will go into Processing.

What Is Processing?

Processing is the step before your file is underwritten. Your assigned processor will go over your entire file and prepare it for underwriting. They will order and prepare every aspect of your file from verifying employment to working with the title company to prepare you for closing. Think of your processor as an editor: they “edit” your file so that it may be “published” (Underwritten). At Service First, all of our loan processing is done at our corporate office in McKinney, TX.


How Long Does Processing Take?

Processors order many different documents from multiple third-party entities. They order tax transcripts from the IRS, title work, homeowner’s insurance, appraisals and more. These things can take anywhere from 5-7 days to receive from the different sources. Most files will remain in the “processing” stage for a week. Once your file is fully processed, it is ready for Underwriting.


What Is Underwriting?

Underwriting is the process where mortgage underwriters will review all of your income and asset documents, title work, appraisal, etc. and issue a full Underwriting Loan Approval. Service First’s in-house team is dedicated to reviewing all of your personal information during the prequalification stage so that underwriting will be a smooth process for you.


How Long Will Underwriting Take?

Underwriting typically takes only 2 days or less. Once your file comes out of Underwriting, your Loan Processor will contact you and go over any items that the Underwriter may have requested, called Conditions.


What Are Conditions?

Conditions are things that the processor will request from you before the file is cleared for Closing. Conditions vary on each file, as every borrower is unique, and could be anything from a phone number for your chosen insurance agent to a divorce decree or a new pay stub. All files typically have small conditions. Even the most organized borrowers still have minor conditions to return at this stage. If, and when, the Processor requests additional documents from you, try to return them back as soon as you can so that everything runs smoothly and stays on track.


What Is "Clear to Close"?

This means you are wrapped up and all of your Loan Conditions are cleared! Once you receive your “Clear to Close”, we are ready for Closing. We will then send your Closing Documents over to your title company. This usually happens a few days before we close.


What Are Closing Documents?

These are the documents that are emailed over to the title company in preparation for your closing. These will include the documents that you will sign, the documents the seller will sign, and very detailed information about all other aspects of your mortgage. Once the title company receives these, they will prepare them for closing and prepare your Closing Disclosure.


What Are Closing Disclosures?

These are your final documents. They will tell what amount you need to bring to Closing, down to the penny.


What Happens at Closing?

This is where you will arrive at the selected title company to sign your set of Closing Documents. Closing will typically take about one hour. If you are married, your spouse MUST attend. Please be sure to bring your ID or driver’s license. Your Loan Officer will let you know when and where to be on this day.


What Is Funding?

It’s time to FUND! This is where the title company will send in all of the documents signed by you and the seller. Once we verify that all documents have been properly signed, we will fund your mortgage and now the home is YOURS!


The highly trained professionals at Service First are experts in the loan process and can guide you through even the most difficult of scenarios. We can take the stress out of the loan process so that you can spend time focusing on your new home. Contact us today to get started!

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