Loan Process Glossary

Understand the key steps, documents, and milestones in the mortgage process with our easy-to-use glossary. Knowledge is power—stay informed and confident every step of the way!

Phases & Steps

The process where a lender evaluates your credit, income, and assets to determine how much you may be able to borrow. Pre-approval gives you a letter to show sellers that you’re a serious buyer.

The phase after your offer is accepted, where you work with your lender to finalize loan details and move toward closing.

A milestone indicating that all underwriting conditions have been met, and your loan is approved to proceed to closing.

The final step in the mortgage process where you sign documents, pay closing costs, and officially become the homeowner.

Documentation

A deposit made to demonstrate the buyer’s commitment to purchasing the property. The amount is credited toward your closing costs or down payment.

Specific to North Carolina, this is a non-refundable fee paid to the seller during the due diligence period, allowing the buyer to inspect the property.

A process where your lender confirms your current employment and income with your employer. A Verbal VOE is typically completed within 10 days of closing.

Signed statements provided by the borrower to clarify items in their financial or credit profile, such as large deposits or unusual credit activity.

A document provided at least three days before closing that outlines the final terms of your loan, including interest rate, closing costs, and the total amount due at closing.

Disclosures

A standardized document provided within three days of applying for a mortgage. It outlines the estimated terms of your loan, including interest rate, closing costs, and monthly payments.

A disclosure that you must sign to indicate that you wish to move forward with your loan application. This allows your lender to order services like an appraisal.

A disclosure required by law that gives you the right to receive a copy of your property appraisal at least three days before closing.

Any material change in your loan application (e.g., rate lock, loan program, or down payment) that requires your lender to re-issue the Loan Estimate or Closing Disclosure.

Key Services & Tasks

The process where the lender’s underwriter evaluates your financial profile, documentation, and the property to ensure it meets loan requirements.

Secures your interest rate for a specific period, protecting you from market fluctuations.

External services required during the loan process, such as an appraisal, title work, and inspections.

Closing & Funds

The total amount you need to bring to closing, including your down payment, closing costs, and adjustments for items like credits or deposits.

An account where funds are held during the loan process, such as your Earnest Money Deposit, or post-closing for taxes and insurance.

A method of electronically transferring your Cash-to-Close to the closing attorney or title company.

This glossary focuses on borrower-relevant terms that clarify each stage of the process, ensuring they’re well-informed and confident. Let me know if you’d like to expand this list!

Expert Advice

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Exhale Lending is a mortgage brokerage firm that embodies trust, transparency, and a genuine desire to help clients achieve financial serenity. With our client-centric approach, expertise, and unwavering commitment to excellence, Exhale Lending is poised to make a meaningful impact on the journey towards homeownership for individuals and families alike.