As noted in Part I of this article, the first two systematic steps in obtaining a mortgage focus primarily on your personal and financial information as well as verifying your employment and funds on deposit.

But steps three through five are a bit more mysterious to most buyers in part because they're typically handled by other players behind the scenes.

Perhaps most understood in loan processing is step three, mortgage underwriting. The underwriter uses the information in the borrower's file and applies it to the guidelines for the type and size of loan requested to determine the risk involved in making the loan. If the borrower is marginally qualified, the underwriter might look for tools like private mortgage insurance, a larger down payment or other compensating factors in order to approve, instead of reject, the loan. Although the average timeframe for this phase is approximately forty-eight hours, online lending and technology will soon make most decisions instantaneous.

Step four also takes approximately forty-eight hours on an average. That's when the lender draws up the loan package and closing instructions and hands them off to the closing agent.

Finally, you're closing the loan.

Depending on the state where the property is located as well as the type of lender you're using, the closing agent can be a title company, escrow company, attorney, or even a real estate agent. The closing agent reviews the closing instructions, obtains signatures from the parties, records documents, and releases funds. Although it takes only thirty minutes to an hour with the borrower, the turnaround time for the closing agent is approximately forty-eight hours on the average.

As you can see, we've lined out the process and given average timeframes. But when glitches occur (as they often do) like additional requests for documentation and appraisers who fall behind, days and weeks are added to the process. That's why even though the loan process is similar for most borrowers, each experience is unique depending on the number of roadblocks, people problems, or the lack thereof along the way!

If you're in midstream mortgage navigation, call your lender periodically to ask:

1. where is the loan in the process?
2. what can I do (if anything) to help move things along?

Let the lender know you're a team player and ready to contribute to a successful closing --- ASAP!

Published: September 8, 2000

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