Thanks to Sharon Gerber at Peak Mortgage for making this handy guide of steps of the Mortgage Process. Feel free to contact Sharon to get pre-qualified. Getting Pre-qualified is the first step to home ownership.

Buying a home can be a very confusing process, especially if the buyer is getting a mortgage! It’s always best to ask your loan officer on questions about getting a loan. Realtors do know some about getting a mortgage although its not our area of expertise! Once an offer is accepted the buyers loan can take up to 60 days to process. Then a home can close escrow and the house will be officially sold. Here is a Mortgage Process Guide created by Peak Mortgage.

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1. Application – This is the first step that gives the loan officer the information they need to help pick the loan program for the buyers needs and goals. It is vitally important that this information is accurate to prevent the loan from being denied later in the process.
2. Pre-Qualification – Once the application has been completed, and the credit report pulled, a pre-qual can be issued to the real estate agent. If  self-employed, the last two year’s federal tax returns will be needed prior to issuing a pre-qual.
3. Pre-Approval – To get a pre-approval all documentation needs to be provided, the loan application must be signed and a borrower’s authorization for credit. When all of this is received, the loan will be submitted to underwriting and will take approximately 4-5 days for the underwriter’s loan decision.
4. Documentation – This step is extremely important and often can hold up a loan. A list of documents needed will be provided. Be sure to review carefully and provide all documents requested. For bank statements, all pages are required, even if they are blank. Sharon does try to anticipate all documents that will be needed at the start of the process, keep in mind a buyer will most likely be asked to provide some additional documents (ex: divorce degree, trust document, additional bank statement) as the loan moves through the underwriting process.
5. Disclosures – Once there is an accepted purchase contract, the mortgage process will be initiated. The loan application and disclosures will be sent to the buyer. These fully signed documents are required in order to get to the next step.
6. Appraisal – This will be ordered by the loan officer once the buyer has indicated their intent to proceed. These appraisal reports take up to 3 weeks to receive in Kauai, due to the limited number of appraisers.
7. Title Report – This will be ordered upon your agent opening escrow. This report shows if there are liens or other problems with the property that may delay or prevent closing.
8. Submission – Once all of the documentation, application and disclosures have been collected, the loan will be sent to an underwriter for approval. Most loans will receive a decision within three business days from being submitted to Underwriting. Some portfolio loans take much longer than this.
9. Conditions – The underwriter will send a loan decision that usually includes some conditions. These may be “prior to doc” or “prior to funding”. It is very important that any of these conditions requiring action or documentation be taken care of immediately. Any delay will cause a delay in getting loan documents. Once all conditions are in, they are sent back to the underwriter for final review and approval, which takes about 48-72 hours.
10. Loan Documents– When everything is approved by the underwriter, loan documents can be ordered. These are the papers that will be signed to close and fund the loan. These take 24-48 hrs to be delivered.
11. Signing– Once the underwriter has indicated that the loan is clear to close, the final closing disclosure will be prepared with 48 hrs. From the time consented that the buyer has received this document there is a 3 day waiting period before going to sign loan documents. The loan officer and Escrow company will arrange a day for signing.
12. Funding- Funding typically takes place a couple days after signing. There may be funding conditions, such as providing a copy of the down payment funds, and possibly a paper trail*. Any other lingering documents must be submitted prior to the loan funding.
13. Recording– Recording takes place 2 days after funding in the state of Hawaii. This is when the property actually changes hands and the buyer takes possession. The real estate agent will make arrangements for the buyer to get their keys!

CONGRATS, YOU ARE A HOMEOWNER! 

*Paper trail – This is showing where the funds originated, for example if someone received a large settlement from an insurance claim, they would provide a copy of the paperwork and check from the insurance company, and the deposit receipt into your account.

Any other questions on the home purchasing process? If yes feel free to contact me! Kela Caspillo, RS (808) 652-6173