FHA Loan Processing

The processing of FHA Loans takes time to make sure all the necessary documents and information are gathered. Everything needs to be well put together so that nothing is missing when the application goes off to the FHA. Here are steps that will need to be taken in order to process your new loan.

FHA Case Number

The first thing your lender will do is request an FHA case number for the property. This way, you will know that the unit for sale is approved by the FHA.

Verification of Employment

A thorough check of your employers from the past two years will be conducted to verify your employment history.

Verification of Deposit

Your bank will be contacted to supply verification of deposit. The lender will need to look at your bank account balances and daily averages from the past three or more months.

Credit Report

Your lender may request a full credit report, which is the combination of the three major credit bureaus.

Escrow

Escrow is an independent third party who acts as the accountant. Detailed instructions regarding the transaction will need to be drawn up by the escrow company.

Purchase Contract

The purchase contract is issued by the seller or agent and signed by the borrower. It is an agreement valid pending the approval of the loan.

Preliminary Title

The title company will inspect the house and draw up a preliminary title report for the property. Included in the report will be anything that will affect the title of the house.

Appraisal

An FHA-approved inspector will be required to appraise the house. A thorough inspection will be conducted and the determined value of the house will be drawn up.

Additional Documents

If there is some discrepancy regarding your bank balances, credit history, work history, etc., you may be required to provide letters of explanation or other supporting documents like cancelled checks, pay stubs, tax returns, etc.

Closing

Once the necessary documents have been compiled, your lender will send all the information to the FHA for review. Once you have been approved you and your co-borrower will need to attend the closing of the loan and pay any closing fees.

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