Mortgage Refinancing - Processing of the Loan

Once you’ve completed the application and provided the documentation, the real mortgage process begins. This process can last anywhere from 10 days to 45 days—but usually is done in three to four weeks. There are many things that have to happen behind the scenes:

Verification of Income and Assets. The loan processor has to make sure that all of the required documents verify what is stated on the application. The lender may mail out verification forms for employers and financial institutions to complete and mail back with current information. This can slow down the process a great deal since you’re waiting on a third party.

Credit verification. A tri-merged credit report (a credit report from all three credit reporting bureaus) is ordered and formatted to delete all duplicates, errors, etc. This can take a few days to get if there are some major creditors not reporting. Once it is received, derogatory information must be addressed and cleared up if possible.

Home Appraisal. An appraisal is ordered from a local appraiser. Appraisals take between 5 and 10 days to get—or up to a month when the property is located in a rural area.

Title report. A preliminary title report is ordered, which means that a title search is underway. Normally this takes about 3 to 5 days. It can take longer, however, if there are any judgments or liens on public record against the property.

Underwriting. Once all of the documents are gathered and the processor has all of your information verified, the whole package is submitted to the underwriter to review. If the underwriter needs additional information to approve you, this is when you will be asked. It is not unusual to get a call from your loan officer two to three weeks after you apply, asking for additional information. The most common additional information required is regarding income. Try to remember that the underwriter wants to approve your mortgage request. They will ask for further documentation only if it is required per the loan guidelines or if they believe it strengthens the overall financial “picture” of you. Get the underwriter what they need as quickly as possible so that they can issue the final approval.

Approval. The underwriter has to review every document to make sure that all of the numbers are correct and to determine if your mortgage request meets the lender’s lending criteria or guidelines.

Appraisal Review. Once the underwriter has determined that your loan package meets the lender’s criteria, they will review the appraisal and title report to make sure that the collateral is acceptable. The collateral is the house itself.