CHAPTER 2 Making the Loan Process Work for You
“ This is the real secret of life — to be completely engaged with what you are doing in the here and now. And instead of calling it work, realize it is play .” – Alan Watts Understanding the loan process from start-to-finish is the best way to ensure smooth sailing and issue-free closing. Knowing what must be done, when it must be done — and subsequently that it was done — is the best strategy for success. Your team, your loan officer, buyer's agent, and attorney are the ones that make this happen for you. The loan process is comprised of four phases: origination, processing, underwriting, and closing. The origination of a loan is straightforward: you decide to enter into a loan agreement with a particular lender. This is the origin of the loan, i.e., origination. Processing is also just what it sounds like: the loan is processed by the lender. Processing usually includes filling out an application and authorization forms, answering questions, and providing personal documents to the lender. Once the loan is processed it moves to an underwriter. When a loan undergoes underwriting, a specialist compares the information in the application and any documents that you have provided with the lender’s requirements and standards for that particular loan instrument. We’ll go in-depth about underwriting 22
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