The loan process should never be daunting. Trust Capstone to find a mortgage that’s right for your needs and isn’t full of surprises or last-minute headaches. Here is a step-by-step guide to the mortgage loan process:
1. Pre-qualification
Before beginning your home search, get pre-qualified. It’s a simple process that determines how much you can borrow, based on your finances. Pre-qualification takes only a few minutes over the phone. We’ll discuss your credit history, employment status, income, assets, debts, and your property & loan program preferences.
Capstone can provide a letter to you or your realtor stating that you’re pre-qualified for a specific loan amount. This gives sellers confidence in your financing capabilities.
2. Application & Processing
The application is the beginning of the actual loan process. You will receive appropriate disclosures; fill out a mortgage loan application, sign forms authorizing the lender to process your loan, and provide required documentation. Documentation required for processing your loan usually includes:
- Two most recent pay stubs
(or past two years federal tax returns if you are self-employed)
- Two most recent W-2 forms
- Two most recent statements from savings, checking, investment, and retirement accounts (all pages)
- Fully signed purchase contract (if applicable)
- Copy of photo I.D. – either driver's license or U.S. passport
At this point in the loan process, Capstone updates your credit report, orders an appraisal & title report, and does extensive research to find the most suitable loan program and lowest interest rate for your unique situation. Once your loan is processed, it is sent to the lender for final approval. The lender reviews the appraisal, title report, and your loan package to ensure it conforms to all guidelines. The lender may require additional validation of employment, mortgage payments, and credit. You may also be asked to provide additional documentation to support your loan.
3. Approvals & Conditions
Loan approval usually takes about 2 or 3 business days after complete file submission (depending on the lender financing your loan). Capstone sends a copy of your commitment letter to all appropriate parties – you, your attorney, the bank's attorney, and the realtor (if you authorize it). Once all items are reviewed and satisfied, the closing date is scheduled.
4. Closing & Funding
Before closing on your loan, you’ll receive a HUD-1 Form. Carefully review these documents before proceeding to settlement. If you have any questions, please contact us.
The closing package is e-mailed and the funds wired the day prior to the closing. The closing attorney acts as escrow agent on behalf of the lender. At this settlement table, you finish the loan process, sign the closing documents, and pick up the keys to your new home. The parties involved may vary based on the property type and transaction type (purchase or refinance), but it typically includes the buyer (borrower), seller, and the closing attorney. All parties are welcome to bring an attorney to the closing.
Refinance transactions (on an owner occupied home) require a three day rescission period from the date of the closing until the lender sends the funds to pay off your old mortgage. This is also referred to as the ‘funding period.’