The Mortgage Loan Process
So you've gotten pre-approved, submitted an offer, and...SUCCESS! Your offer was accepted!
The first step is to tell me, your loan officer! I won't automatically know that your offer was accepted and that you opened escrow unless you or your real estate agent notifies me.
Don't delay, because now you're in contract and "time is of the essence." We need to hit deadlines and milestones to ensure you are not in default and we close on time. Here's a general timeline for the loan process:
1. Sign Application and Disclosures
After I receive a complete application from you, I will hand it over to one of my dedicated processors who will compile the required disclosures, obtain fees from title companies, and upload the file into the lender’s system.
During this time, the processor will reach out to you to sign a set of disclosures for C2 Financial, as well as a separate set of disclosures from the lender, if necessary. Most of these forms will be signed electronically, but there may be a few that will require a wet signature.
It’s imperative that these disclosures are signed as soon as they are available, so as not to cause delays. Signing these “initial disclosures” does not obligate you to any interest rate or loan program, so if you haven’t made up your mind just yet, it’s ok because you can change it later.
Most lenders will be able to deliver their required disclosures to you electronically rather than having to postal mail them. As you can imagine, electronic delivery greatly speeds up the loan process. It’s crucial that you follow a lender’s “e-consent” process to allow them to deliver disclosures to you electronically.
3. Package Loan and Order Appraisal
Once we get the signed disclosures from you, the loan will be packaged for underwriting. We will also order the appraisal on your behalf unless there is a reason to wait. The appraisal fee is a third-party fee that you must pay for up-front. It is the only loan related fee you should be paying for up front unless we are applying for a VA loan. VA loans will allow the appraisal to be paid for at closing rather than up-front.
Since most people will have to pay for the appraisal out of pocket, it's best to order the appraisal only when you are certain you will be moving forward with the purchase and you have done your due diligence in the J-1 Inspection period.
Upon receiving a complete loan package, the lender will underwrite the loan and issue a Conditional Approval. They will provide a list of outstanding items needed to fully approve the loan. Many of the items are “behind the scenes” types of things, but we may need to reach out to you again for some the conditions.
Here's a quick video to explain the underwriting process:
While the loan is in Underwriting, the Appraisal Report inspection is being conducted. If this is a Purchase loan, there is nothing you need to do. If this is a Refinance, then the Appraiser will contact you to schedule a day to inspect the property. After inspection, the report should be available within 3-5 days and will be sent to you and the lender for review and approval.
Here's a quick video to explain the appraisal process:
6. Final Approval
After all outstanding conditions and the appraisal report are cleared, the loan will be ready for Final Approval. If there are any changes you’d like made to the interest rate or loan amount, it should happen now. With the Final Approval, we are Clear to Close, and we can start wrapping everything up to get you into your new home!
Here's a quick video regarding the Closing process:
7. Pre-Closing: The Closing Disclosure
The Closing Disclosure (CD) is required to be sent to you at least 3 days prior to close. The CD outlines the final terms of the loan: loan amount, interest rate, origination fees, payment amount, etc. To expedite the closing process, some lenders will send out the CD as soon as those terms are finalized, even if we aren’t yet ready to move to closing. This is beneficial because it allows you to review those terms and meet the 3-day review requirement, and close the loan sooner.
Once the CD is reviewed and acknowledged, my processor will order loan documents. We will schedule a date and time for you to sign the loan documents, either at the escrow office or in the convenience of your own home. If there are any remaining funds needed to close the loan, those funds would need to be made available either by wire deposit or a cashier’s check on the day you sign the loan documents.
9. Funds Disbursement and Recording
After the loan documents are signed, the escrow company usually must clear some outstanding funding conditions for the lender, and only after that is cleared, will they have the go-ahead to order the wire and disburse all funds. Two business days after funding, the new mortgage is recorded with the State of Hawaii. If you are buying a new home, this is when you normally get the keys to the property. If refinancing, this is when your old mortgage is removed from title and the new one is added.