Loan Processing Procedures
There are various procedures that a lender follows to correctly process and expedite the loan approval. After the application is taken, the loan is “set-up”. The following procedures then begin.
- Appraisal is ordered: VA and FHA loans usually take three to four weeks; conventional loans normally take two to four weeks.
- Credit Report is Ordered: This is ordered from a reputable credit reporting agency and receipt of the report takes from one to two weeks.
- Employment Verifications are Sent: All employment(s) must be verified for a minimum of the past two years, in writing, by present (and past) employer(s).
- Deposit Verifications are Sent: All bank accounts and bank loans must be verified by the bank(s) to determine that the applicant has sufficient funds to close the sale, and also has an acceptable credit rating with the bank(s).
- VA Certificate of Eligibility: This is ordered and is essential to the funding of a VA loan. It generally takes two to three weeks to receive this document.
- Property Location: This is checked on the area flood control maps to determine if flood insurance will be required.
When all of the above items are cleared by the loan processor, the loan application is then completed. The applicant (and co-applicant) may be requested to come to the lenders’ office for completion, approval and signing of the application. Please remember that both the applicant and the co-applicant, when there are to be co-mortgagors, must sign the application – with the EXCEPTION of the VA application, where only the signature of the veteran is required.
The loan application package is now ready for submission to the VA, FHA or conventional investor, if required. While the loan is being processed, the lender will order the Title Policy Commitment and property survey for the loan closing. Commitment letters, as required, are completed and sent.
All of the above items must be received and approved by the closer prior to the date of closing, and with sufficient time for the closer to prepare the closing figures, closing statement, and other closing documents.