Find the mortgage loan process confusing? You’re not alone!
At Southwest Funding, we take pride in educating our customers so you feel empowered to make knowledgeable and informed decisions regarding your financial future.
Step 1: Locate a Loan Officer to Work With
A loan officer should be able to communicate well and help guide you through the home buying or refinancing process. Purchasing a home is one of the most major purchases you will have the opportunity to make. And whether you are ready right now, or just planning to purchase in the next year or two, you will want to have a loan officer who is on your side and guide you through to homeownership.
Step 2: Pre-Qualify for a Loan
When placing an offer on a home, you may be required to provide the seller with a prequalification or preapproval letter. For a prequalification letter, your Loan Officer will request financial information, including income, assets, and debts in order to determine how much of a loan you can afford. For a preapproval letter, your Loan Officer will request documentation to support the financial information provided and will submit that documentation to the Underwriting Department for a credit eligibility review. Southwest Funding will then issue you a letter stating the loan amount for which you are pre-qualified or pre-approved. Please note that a pre-qualification or pre-approval letter is not an offer of credit or a loan approval. Final loan approval will be subject to a review of satisfactory appraisal of the subject property, fully executed purchase contract, preliminary title report, confirmation of no material change to your employment status, income, assets and credit, and any/all other conditions or terms as required as part of the final loan approval.
Step 3: Find Your Home and Make the Offer
Provide your Realtor with the Southwest Funding pre-qualification or pre-approval letter along with the specifics you are looking for.
Step 4: Property Inspection
Once your offer has been accepted, you have the right to have a licensed inspector review the home for any potential problems or safety hazards. In some cases, you may request repairs to be completed prior to closing the sale.
Step 5: Select a Loan Program
Many loan programs are available to you and your Southwest Funding Loan Officer will guide you through the many options, fees, and interest rates to choose from. Our goal is to make sure you are fully aware of all of the advantages of each product available. These options are covered during the pre-qualification or pre-approval process.
Step 6: Complete the Loan Application
The loan process begins with your completion of an application with your dedicated Southwest Funding Loan Officer. Once your Loan Officer has received your application, you will receive initial disclosures that will explain the loan program and costs associated with the loan along with other required federal and state information. Once you confirm your intent to proceed with the loan, your Loan Officer will request a number of supporting documents, most of which are described below. Once your Loan Officer has received your documentation, the loan approval process can proceed.
Documents required for most home purchase loans:
- Most recent 2 years Federal Tax Returns (all schedules of 1040’s)
- Most recent 2 years Corporate Tax Returns (if applicable)
- Most Recent 2 years W-2’s
- One month’s most recent pay-stubs
- Copy of Driver License
- Most recent two months worth of bank statements to source down payment and closing funds (all pages / even blank ones)
- For all properties owned, please gather:
- Most recent mortgage statement (including home equity loans)
- Most recent homeowners association statements
- Most recent homeowners insurance policy statement
Step 7: Processing the Loan Application
Your Southwest Funding Loan Officer has a team of highly experienced Loan Processors supporting your needs as well. The loan processing team is responsible for verifying the accuracy of the information you provide in your application. In addition, they will review your credit report, order an appraisal, title commitment and other third-party information necessary to submit your loan into underwriting.
Step 8: Loan Underwriting and Decision
Once fully processed, your loan will be submitted into underwriting for a decision. Southwest Funding staffs many of the most experienced underwriters in the industry and can typically complete the initial review within 24 to 72 hours. If there are additional supportive documents needed, our underwriter will condition for those items and work closely with processing as well as your Loan Officer to help you satisfy those requirements.
Step 9: Clear to Close / Document Signing
Once the application has been approved and all underwriting conditions have been met, your loan will move on to the next stage. Depending on the state in which the property is located, loan documents might need to be signed and executed by a notary of public prior to funds being disbursed or are disbursed at signing. Either way, Southwest Funding is equipped to facilitate both procedures expeditiously so that you can close your new home purchase on-time and without hassle.
Step 10: Funds Disbursed and Loan Recording
Once the title company receives the funding wire from Southwest Funding, the security instrument is recorded with the applicable public recorder. Escrow is now officially closed and you are ready to move in!