What Happens Between Home Loan Underwriting & Closing?

The details involved in buying and selling real estate change with each transaction, but some general things need to be done between signing the first sales paperwork and the momentous time when your real estate agent says, "It's done!" Everyone -- escrow and title offers, real estate agents and you -- has important work to do to make sure the deal closes.

TL;DR (Too Long; Didn't Read)

During the mortgage process, the time frame from underwriting to closing determines whether the lender will approve the loan. Underwriters evaluate a borrower's financial situation and assess the value of a property before advising the lender to approve or deny the loan. If approved, the mortgage moves forward to closing.

Entering Escrow and Underwriting

The escrow and underwriting processes operate in synchronicity as a loan moves toward closing. Your escrow office wrangles the paperwork in buying and selling a house once the sales agreement arrives. Buyer and seller typically split the escrow fees.

Escrow follows a checklist based on the directions given in the sales contract, including collecting paperwork from the real estate agents, buyer, seller, title officer, tax officials and real estate brokers. The escrow officer also follows directions given by lenders, both the new buyer's lender and the seller's lender, if the property has a home mortgage.

Underwriting is the process of putting the loan paperwork together and deciding if the lender wants to make the loan on the property. Underwriters collect and verify the buyer's financial paperwork and house information, obtain the property appraisal and request the title search. Underwriter officers also order the physical property survey and get maps and tax information from county offices.

Buyers and Sellers

Buyers set up inspections, meet with the lender to deliver paperwork and investigate the statements made on the home disclosures about potential risks to the new home. Sellers arrange times for buyer's inspectors, order the official loan payoff statement from the lender, sign escrow paperwork and answer questions their real estate agent brings from the buyers. They may need to fix things around the house to keep the deal in escrow, if inspectors find damage or problems.

What Everyone Else is Doing

After you sign the sales agreement, your real estate creates a checklist of things that need to be done to close. Seller's and buyer's agents work together to collect paperwork for escrow, order the requested inspections and network with you and your lender.

Your escrow officer has a separate checklist of duties, including ordering the title report, collecting documents from the lender, wrangling all paperwork required by everyone and making sure you sign all documents. Any changes made in the agreement mean your escrow officer whips up new documents for both buyer and seller to sign. Escrow officers operate under deadlines -- sometimes less than a week or two from the sales agreement signing.

What Happens at Closing

The official closing happens when the escrow officer checklist is complete and the bank notifies the buyer that the loan is ready to fund, meaning the money moves from the bank into the official loan account. Closing means buyers sign final loan documents and both buyer and seller sign the official paperwork to transfer property ownership. In some states buyer, seller and agents all meet in person at the escrow office for the closing, but in many states only the escrow officer and the agents need to be present for the big event.

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