Submitting your mortgage application is an important step, but it is only the beginning of the loan approval process.
From the time you apply until the day you close, your mortgage goes through several stages. Documents are reviewed, the property is evaluated, your loan is underwritten, and final closing figures are prepared.
At Capital Funding Mortgage, we help guide you through each step, explain what is needed, and work with the lender, title company, real estate professionals, and other parties involved to keep your loan moving toward closing.
If you have already submitted your mortgage application and aren't sure what happens next, call or text John Madden at 215-601-6724.
I'll be happy to explain where you are in the process and what to expect next.
The first step is making sure we have the information and documentation needed to process your loan.
Depending on your situation, this may include:
Self-employed borrowers, investors, and borrowers using alternative income qualification may have different documentation requirements.
Don't be concerned if additional documents are requested later. It is very common for a lender to request updated or supplemental information during the mortgage process.
After your application is completed, the lender provides the required loan disclosures for your review.
For most mortgages, these include a Loan Estimate, which summarizes important information about the proposed loan, including:
Review these documents carefully and ask us about anything you don't understand.
The Loan Estimate is designed to give you an early picture of the financing. Some figures may change as items such as taxes, insurance, title charges, and other third-party costs are finalized.
Once the initial documentation has been received, the loan moves into processing.
The processor reviews the file to make sure the necessary documentation is present and identifies anything that may still be needed before or during underwriting.
During this stage, the lender may verify items such as:
Think of processing as assembling and organizing all the pieces of your mortgage application before final approval.
For a home purchase, the lender generally needs to confirm information about the property being financed.
When required, an appraisal is ordered to provide an independent opinion of the property's value.
In some cases, an automated appraisal waiver may be available, which means a traditional appraisal may not be required.
The title company or settlement provider performs a title search to identify ownership information, existing liens, and other matters affecting title to the property.
Title work also helps establish what needs to be paid or resolved before ownership can transfer and the lender's mortgage can be properly recorded.
If you are purchasing a home, your home inspection is separate from the lender's appraisal. An inspection is primarily for your benefit and evaluates the property's condition.
Underwriting is one of the most important stages of the mortgage process.
The underwriter reviews the complete loan file and determines whether it meets the lender's and applicable loan program's requirements.
The underwriter may evaluate:
The goal is to verify that the loan meets the requirements for approval.
Many mortgage approvals initially come back as approved with conditions.
This does not necessarily mean there is a problem with your loan.
It simply means the underwriter needs one or more additional items before issuing final approval.
Examples might include:
We review the conditions with you, help determine exactly what is required, and submit the necessary documentation to the lender.
Providing requested items promptly can help keep the loan moving on schedule.
Once the outstanding conditions have been satisfied, the file returns to underwriting for final review.
When the lender determines that all required loan conditions have been met, the loan can receive a Clear to Close.
This is an important milestone. It means the loan has completed the primary underwriting approval process and the parties can move toward settlement.
However, borrowers should continue to be careful with their finances until the transaction has actually closed. Lenders may perform final employment, credit, or other verifications before funding.
As closing approaches, the lender works with the title or settlement company to finalize the financial details of the transaction.
These may include:
These figures determine your final cash to close.
For most mortgages, you will receive a Closing Disclosure at least three business days before closing. The Closing Disclosure provides the final details of your mortgage, including your loan terms, payment, and closing costs.
Review it carefully.
If something doesn't look right or you don't understand a charge, contact us. We want you to understand the numbers before you arrive at closing.
There are usually a few final items to complete before settlement.
Depending on your transaction, you may need to:
Your settlement or title company will provide instructions for transferring any money required for closing.
Always independently verify wire instructions before sending money. Real estate transactions can be targets for wire fraud. Never rely solely on an unexpected email containing new or changed wiring instructions.
Closing—also called settlement—is the final step.
You will review and sign the documents necessary to complete your mortgage and, for a purchase transaction, transfer ownership of the property.
Documents commonly signed at closing include the promissory note, mortgage or security instrument, Closing Disclosure, and other lender and settlement documents.
Once the required documents have been properly executed and the transaction is funded, your mortgage closing is complete.
For a home purchase, this is also when you can finally look forward to receiving the keys to your new home.
One of the best ways to help prevent last-minute problems is to keep your financial situation as consistent as possible between application and closing.
Unless you have discussed it with your mortgage professional first, avoid:
Even after receiving a loan approval, significant changes to your credit, employment, income, assets, or debts can affect the loan.
When in doubt, call me before making a major financial change.
You don't have to figure out the mortgage process on your own.
I've been helping homebuyers and homeowners with mortgage financing since 1999, and I remain personally involved throughout the process.
Whether you're buying your first home, moving to your next home, refinancing, purchasing an investment property, or dealing with a more complicated mortgage situation, I'm happy to discuss your options and explain what happens next.
Call or text me directly at 215-601-6724.
Owner, Capital Funding Mortgage Associates, Inc.
NMLS #960748
Call or Text: 215-601-6724
Email:Johnfmadden@capitalfundingmortgage.com
Office: 41 University Drive, Suite 400 #475
Newtown, PA 18940
Capital Funding Mortgage Associates, Inc.
Company NMLS #960139
Serving homebuyers and homeowners throughout Pennsylvania and New Jersey.
Whether you're ready to apply or simply have questions about your mortgage options, contact me. There is no obligation to apply just to have a conversation.
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