You’ve provided lots of documentation, including pay stubs, bank statements, and tax returns, to your lender as part of your home search. You’ve found your dream home and signed the contract. So what’s next?
Much documentation was required to prequalify you before you could even start looking for your new home, but don’t consider that chapter closed just yet.
Your first step after signing the contract is asking your attorney to review it. His or her job is to catch things on the contract that may have been missed. These may be items that favor the seller, not the buyer, so this is a step that absolutely should not be skipped.
The second step is a home inspection, which, unlike the appraisal required by your lender, isn’t mandatory. However, it is a good idea and may save you money in future. You have a small window to decide whether to order an inspection, which may be done simultaneously with the appraisal.
Providing all goes well with your attorney, the inspection, and the appraisal, your file moves into underwriting, where your loan is put under great scrutiny for several reasons.
The most important reason is to ensure that the lender has a complete file. Many loans are sold off by the lender shortly after; you may need to provide updated or additional documentation to satisfy the buyer of the loan. You may also need to clarify, in letters of explanation, anything the underwriting process has uncovered that seems unclear. This is typical. The file is also checked for compliance, verifying that you were provided with the correct disclosures in the correct time frame.
Once the underwriting process is complete, you are ready to go to closing. This is where you and the seller settle the transaction, and the house becomes yours. So congratulations are in order. Finally!