Mortgage Loan Process
Home Loans for Tennessee, Georgia, and Alabama

FHA, VA, Rural Development, Conventional, Purchase and Refinance Mortgages

Apply online - secure, free, simple 

The loan process can seem lengthy, but understanding the basic steps can make sense of everything. The process is very similar for purchase loans and for refinance loans, the two basic loan purposes.

Selecting a mortgage loan officer

Selecting a mortgage loan professional starts the process. Most consumers begin their loan process by asking the Rate Question. What is your rate? This is generally recognized not to be the best criteria to select a loan originator and a mortgage company. Competition and the transparency of the internet have made differences in rates and fees small. Even recommendations may not be reliably accurate.

When speaking to loan officers you are considering, try to evaluate their professionalism, their knowledge, their rapport with you, and their commitment to communicate with openness and truthfulness.

Initial application.

The application is the single most important step of the process. The information about your objectives, residence and employment history, income, assets, debts, and consumer disclosures must be accurate and thorough.

The documentation of your income and assets is critical. Your loan officer should be able to communicate precisely what documents will be needed for your loan application. If you want a smooth closing , provide the requested documentation – all pages.

Preapproval

Most loan applications are submitted to an automated underwriting system. It evaluates income, debt, assets, credit, employment and residence history, down payment, and other criteria. The automated underwriting system issues an approval or a referral at that time. Some loan programs allow for manual underwriting, others programs require an automated approval.

Credit check and verifications

Verifying the information on the application is the next step. Your residence history and employment history will be checked and your income, asset and other documents will be reviewed.

Submission to underwriting

The fully processed file is submitted for approval

Property checks

The appraisal and title search check the value, condition and chain of title for the property that will secure the loan.

Underwriting conditional approval

This is actual loan approval. It involves either verification of the automated approval input or the actual credit evaluation in the case of manually approved loan program.

Final approval

The approval received after the initial loan submission will often require some additional documentation – updated paystubs, bank statements, credit explanations, more appraisal checks. The final approval is given when all loan approval requirements have been met. There will be an expiration date on this final approval based on the age of the loan submission documents.

Clear to close

This submission status means that the loan is ready to have the closing papers prepared. The loan interest rate, all closing costs, property taxes, home owner insurance premiums are set. The closing date is selected. All property title check have been complete. For a refinance, the existing loan payoffs are documented.

Closing

The loan papers that are signed at closing are many. The most important are the property deeds, the mortgage note, and the settlement statement. For a purchase, there are two deeds. One deed transfers title and one deed attaches a lien against the property to secure the debt. For a refinance, there is only the deed that secures the lien. The mortgage note discloses the final terms of the loan – interest rate, repayment terms, payments, prepayment penalties, etc. The mortgage note should be exactly the type and terms of the loan that you expected.

Sales Contract

For purchases, during the process you will find a property to buy. The sales contract stipulates the sales price, the closing date, and the other stipulations of the transaction.

Lock

During the process, you will need to lock in an interest rate. This should be a commitment on your part to accept the loan terms that have been presented. The lock will have an expiration date. The lender commits to close the loan at the locked rate, as long as the loan is approved before the lock expiration. During the loan process and the locked period, most likely mortgage interest rates will fluctuation, maybe going lower and higher than your locked rate.

See today's rates.

See today's rate lock recommendation.

New construction

For construction loans, two additional steps are required. The approval process includes the new construction project itselt and the builder qualifications.