For Buyers: The Loan Process

• Application - Fill out an application and provide supporting documents.

• Documentation - The lender normally requests a credit report, employment history, and personal financial conditions.

• Loan Submission & Approval - The lender will review your application and supporting documents, and submits your completed file for approval.

• Documents are Drawn - The lender will prepare your loan documents and forward them to the title company.

• Funding - The completed loan documents are forwarded back to the lender, and the lender sends the loan funds to the title company.

• Closing - The title company records the change of ownership at the county recorders office, and escrow officially closes.

What the difference between 'pre-qualification' and 'pre-approval'?

Typically, the difference is the documentation and verification. To become pre-qualified, the buyer relays verbal information to the lender. This can be done in a short period of time, and sometimes over the phone; it's an estimate of mortgage purchasing power and subject to the verification that the information provided is correct. To become pre-approved the buyer provides all necessary documentation such as income paystubs and bank statements. While neither one is a mortgage commitment nor a guarantee, a pre-approval letter is stronger and most often preferred by the seller.