The Purchase Process

Helping your clients through every step of the purchase process is important to us—from the initial consultation all the way through closing. The overview below outlines each step of the process and some of the most critical aspects to be mindful of. The more familiar your clients are with this information upfront, the more prepared and empowered they will feel throughout the transaction. Feel free to forward this information to any clients who may be considering a new mortgage—we’re here to answer any questions!

PRE-APPROVAL:  The first step in the purchase process is to contact us for a complimentary pre-approval. This consists of a preliminary conversation so we can review the details of your proposed transaction and your financial profile. Then we will let you know what documents we need from you in order to complete the pre-approval process. Once we’ve verified all of the pertinent details, we will be ready to send you and your agent a formal pre-approval letter confirming that you are qualified for your proposed price range and loan amount.   

MAKE AN OFFER: Once you’ve identified a property that you want to make an offer on, contact us for a pre-approval letter. This letter should be submitted along with your written offer to the listing agent (or directly to the seller on “For Sale by Owner” transactions). This letter serves as confirmation for the seller that you are qualified for the financing that you’ll need to purchase the property.

ACCEPTED OFFER: Once your offer is accepted, we will email you a list of documents that you will need, to get the approval process started. If you’re purchasing a co-op or condo, we recommend that you make an extra copy of all loan documents because you’ll likely need to include them with your co-op/condo board package. While you’re gathering these documents, you will also be working with your attorney to review and finalize the terms outlined in the contract of sale. Once you and the seller are in agreement on the contract terms, you will sign the contract and write a check for the escrow deposit (typically 10% of the purchase price for NYC transactions). After the seller counter-signs the contract, you are officially “in contract/escrow”. The contract negotiations typically take 5-10 business days to complete, but it can take longer for more complicated transactions. By the time you have a fully executed contract of sale, you should have all of your loan documents compiled and sent to us.

SELECT A LOAN PROGRAM AND APPLY: Once we receive your initial packet of documents, we submit the paperwork to our data entry group to set up your loan file. Within the next few days, our team will contact you to discuss next steps and any additional documentation or information needed to submit the loan application for approval. Once we have received all of the additional documents we’ve requested and confirm your intent to proceed, your loan application is submitted to the underwriter for review and approval.

APPRAISAL: After you have signed the appropriate disclosures and confirmed your intent to proceed with the loan, we initiate the appraisal order. The appraiser contacts the listing agent (or seller on “For Sale by Owner” transactions) to schedule an appointment to inspect the property. It takes approximately 1-2 weeks after the inspection for the appraiser to finalize the report and send it to the underwriter for review. In some cases, the underwriter may request that the appraiser make certain updates or corrections on the report, which can add additional time to the appraisal process.

LOAN APPROVAL / COMMITMENT LETTER: Once the underwriter has confirmed that your loan meets the approval criteria, a loan approval (called a “Commitment Letter”) will be issued. Our Processor will then email you a copy of the Commitment Letter along with a list of the additional items (called “conditions”) that we need from you to get your loan cleared for closing. In addition to these items, there may be other documents we will obtain on your behalf from other parties involved in the transaction (managing agents, title companies, etc.). Once all of the conditions have been compiled, we submit them to the underwriter. If the underwriter signs off on all of the conditions (they reserve the right to request additional items if needed), they issue a “Clear to Close” notification. This indicates that the underwriter has given final approval on your loan and your attorney is now able to schedule the closing.

CONDO / CO-OP BOARD APPLICATION: If you’re purchasing a co-op or condo, you may be required to submit a “board package” to the board of directors of the building after the commitment letter is issued. This “board package” consists of important reference letters and financial documents that the board will review to determine if you meet their criteria. If you do meet their criteria, they typically set up an in-person interview to decide if they will approve you to purchase in the building. It can sometimes take several weeks to get a meeting scheduled with the board, so it’s important that you begin to assemble your board package and inquire about submission deadlines as soon as your contract is fully executed.

CLOSING: Once your loan is cleared for closing by the underwriter and the title report/lien search is approved by the lender’s attorney (and you are board approved on co-op or condo transactions), your attorney will then coordinate a mutually acceptable closing date and time with all parties. Our closing department will prepare the final loan documents, fee breakdown and check instructions and send them to the lender’s attorney approximately 24 hours prior to the closing. The lender’s attorney provides the final fee breakdown to your attorney, who then forwards the information to you. You will need to obtain certified/bank checks (personal checks are not acceptable) for the amount specified by the lender’s attorney. Since the check instructions aren’t typically available until 24 hours prior to the closing, you should be prepared to get the checks on the day of the closing. At the closing, your attorney will walk you through all of the legal documents that need to be signed. The funds will then be disbursed and you will be able to take formal ownership of the property. A typical closing takes 1-2 hours depending on the complexity of the transaction. 

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