What Happens After Final Loan Approval?

After the final loan approval, the process transitions from application to closing, with a series of important steps that must be completed before the loan funds are disbursed. Once your loan is approved, it means the lender has reviewed your financial information and has agreed to extend you the loan. Here’s what typically happens next:

1. Loan Commitment Letter: The first step after final loan approval is receiving a loan commitment letter from the lender. This letter is a formal agreement to lend you the money under specific terms. It outlines the amount of the loan, the interest rate, the term of the loan, and any other relevant conditions. The loan commitment letter may also list any outstanding documents or conditions that need to be satisfied before closing.

2. Appraisal Review: The lender will ensure that the property appraisal supports the loan amount. If the appraisal is lower than expected, you may need to renegotiate the purchase price or provide additional funds to cover the difference.

3. Title Search and Insurance: A title search is conducted to verify that the property has a clear title, meaning there are no liens or legal claims against it. Title insurance is usually required by lenders to protect against potential issues with the title.

4. Homeowners Insurance: Before the loan can close, you'll need to secure homeowners insurance. This insurance protects both you and the lender in case of damage to the property.

5. Final Walkthrough: A final walkthrough of the property is typically conducted a day or two before closing. This ensures that the property is in the agreed-upon condition and that any negotiated repairs have been completed.

6. Closing Disclosure: At least three days before closing, you will receive a Closing Disclosure, which provides a detailed breakdown of the loan terms, closing costs, and what you need to pay at closing. It's essential to review this document carefully to ensure there are no surprises.

7. Signing of Closing Documents: On the day of closing, you'll meet with a closing agent to sign all necessary documents. These documents include the mortgage note, the deed of trust, and other legal papers. You'll also need to bring a cashier's check or arrange a wire transfer for the down payment and closing costs.

8. Funding: Once the documents are signed and all conditions are met, the lender will wire the loan funds to the title or escrow company. This is known as funding the loan.

9. Disbursement of Funds: After funding, the title or escrow company disburses the funds to the seller, and any other parties involved, such as real estate agents and inspectors.

10. Recording of the Deed: The title company will record the deed and mortgage with the local county recorder's office, making the transfer of ownership official.

11. Keys and Move-In: Finally, you'll receive the keys to your new home and can begin the process of moving in. Congratulations, you’re now a homeowner!

This entire process can take a few days to several weeks, depending on various factors such as the complexity of the loan, the efficiency of the title company, and the preparedness of all parties involved.

In summary, final loan approval marks the beginning of the closing process. While it can be a time of excitement, it also requires careful attention to detail to ensure everything goes smoothly. From reviewing the loan commitment letter to signing the final documents, each step is crucial in securing your new home.

Additional Considerations:

• Rate Lock: Ensure that your interest rate is locked in to avoid any last-minute changes.
• Documentation: Keep all your financial documents organized and ready for any last-minute requests from the lender.
• Communication: Stay in close contact with your lender, real estate agent, and title company to ensure a smooth closing process.

By following these steps and staying informed, you can navigate the post-approval process with confidence and ease.