Your Guide to the Loan Process Pt. 2

In Part 1, Kyla Craven and Lance Wardlaw, Carolina Farm Credit lenders in the Carthage and Pilot Mountain branches, respectively, shared the importance of an open, frank conversation with your lender to get your financing needs off to a great start.

After that important initial conversation with your lender and the gathering of pertinent documents needed to complete the application process, much of your work is done, for the time being, and your lender gets to work.

This often is the point where your lender runs your credit to get a clear picture of where you are on the credit standpoint. Your lender will also analyze your financial statements to validate the information provided. If you are purchasing real estate, the lender may check further into that before the actual appraisal step.

“I like to let the borrower know where we are in the process,” says Kyla. “As soon as we’ve reached the point of approval, it’s important to not only let the customer know, I like to tell them what the next steps are, whether it’s conducting the appraisal, pulling titles, contacting the attorney, or setting a tentative closing date.”

Communication is the key through the whole process. Just as Kyla and Lance urge borrowers to be open and upfront as they discuss their borrowing needs, the lenders recognize that they, too, need to communicate often throughout the process. “That’s not only with the customer but all parties that are involved,” explains Lance. Frequently, that will include an attorney.

Timeframe to Expect

With something like equipment or livestock, it typically takes 2 to 3 days to turn the loan around, depending on the customer. With a purchase such as real estate, it typically takes 30 to 45 days to work through the process from start to closing. As soon as the loan has been approved and the appraisal has been completed and reviewed by the lender to ensure it meets their guidelines, documentation is sent to the attorney.

The attorney is responsible for several items such as either a HUD statement or a closing disclosure that outlines the costs and fees of the loan. It is an itemized statement that lets the borrower know where every penny is going and what they should bring to the closing.

The next step is the closing, the day you’ve been anticipating, and the day you’re a step closer to your dream. When all parties have done their work in phases 1 and 2, the closing table is often where everyone is happy. “That’s the goal,” says Kyla. “We want to make sure the customer leaves the closing happy.”

“Your Guide to the Loan Process, part 3” shares what to expect during the closing.   # # #

By Leah Chester-Davis