Phase 3: Underwriting & Closing

What Happens After Submission?

Once application is submitted, human underwriters take over:

Week 1: Initial Review

Who: Processor and Underwriter
What They Do:

• Review all information for completeness
• Verify income and employment
• Confirm property value
• Run final credit check (hard pull)
• Check for any discrepancies

Borrower Action: Respond to any condition requests

Week 1-2: Conditions

What Are Conditions?: Additional information or documentation needed

Common Conditions:

• "Provide 2 months of bank statements"
• "Get letter from employer confirming employment"
• "Explain credit inquiry from March 2025"
• "Provide proof of homeowners insurance"

Borrower Action: Upload documents or provide explanations via dashboard

Week 2-3: Document Signing

What: Electronic signature of loan disclosures

Documents to Sign:

• Truth in Lending (TIL) disclosure
• Home Equity Credit Agreement (HECA)
• Closing disclosure
• Other regulatory documents

Borrower Action: Review and sign electronically

Week 2-4: Appraisal

What: Licensed appraiser evaluates property

Process:

1. Borrower or Loan Officer orders appraisal
2. Appraiser schedules property visit
3. Appraiser inspects property (30-60 minutes)
4. Appraiser writes report (2-5 days)
5. Underwriter reviews appraisal

Borrower Cost: $400-$600 (paid upfront)

Risk: If appraisal comes in low, may need to reduce loan amount

Week 3-4: Final Approval

Who: Senior Underwriter
What They Do:

• Review complete file
• Verify all conditions satisfied
• Confirm appraisal supports loan amount
• Issue "Clear to Close" decision

Outcomes:

• Approved: Loan clears for closing
• Conditional Approval: A few more items needed
• Suspended: Missing critical information
• Denied: Doesn't meet final underwriting guidelines

Week 4-6: Closing & Funding

What: Final loan documents signed and funds distributed

Process:

1. Title company prepares closing documents
2. Borrower signs closing documents (in person or remote)
3. Title company records lien on property
4. Lender funds loan
5. Funds distributed according to borrower's instructions:
   • Pay off existing mortgages
   • Pay off selected debts
   • Cash to borrower (if cash-out loan)

Borrower Action: Sign final documents, provide any last-minute items