To reach full loan approval, your loan application goes through various steps of verification, documentation, processing, and underwriting before your closing date. Check out the step-by-step process of your loan from application to closing.
1) Loan Application
- W-2’s for the last two years
- Two most recent pay stubs
- Last two months’ bank statements for all financial accounts, including investments
- Last two years personal tax returns
- Photo I.D.
- Two-year residency history
Self-employed, or those individuals paid on commission, will also need to provide two years federal and business tax returns.
2) Submit File to Processing
After your application is received, it is reviewed by a processor to make sure the information within your application is complete and accurate. Processors look for errors, discrepancies and other things that may need clarification for your loan to get approved. Your loan processor will also verify your employment, rent, etc. Your processor will also search for debts that you may have forgotten to disclose during the application process.
3) Order Appraisal
Your lender will then order an appraisal to be performed by a licensed appraiser – which is typically needed for the mortgage to be approved and financed. Appraisers will consider comparable properties that have sold recently and general condition, age, location, size and features of the home to determine the fair market value of the property.