When a prospective buyer decides to take on a conventional loan, applying is the first step. The buyer submits several documents outlining their current financial status, credit score, proof of employment or income, assets, and liabilities.
The lender then gathers title reports on the property to verify there are no liens against it and schedules a real estate appraisal to establish the home’s market value. After these steps, the lender makes a final determination whether they’ll underwrite the loan.
If the lender accepts the application, the closing process begins, and both parties sign mountains of paperwork. A closing agent double-checks the documentation to ensure the process was followed correctly. The sale then closes, and the loan is funded, usually within a few days.