Site hosted by Build your free website today!

The Loan Lifecycle

The process of making a mortgage loan has five distinct steps called the loan cycle. The loan cycle is comprised of the steps taken to make and maintain a loan. The mortgage loan cycle begins when a prospective Borrower inquires about a residential mortgage loan, and it ends when the Borrower pays off the loan.  AHMCC will take you through the first four steps as we don't "service" the loans. 

The loan cycle involves five major stages:

I.   Application

II.   Processing

III. Underwriting

IV.  Closing

V.   Servicing

Each of these functions involves many activities.

I.   Application
The application process has several purposes:


II.      Loan Processing
Loan processing includes the collection and verification of detailed information on the Borrower and on the real estate transaction itself.   The Lender is primarily interested in two things:   the subject property, and your financial situation (which includes your credit history.)  The process gathers the information to help determine your ability and your desire to replay the loan.

III .     Loan Underwriting
The mortgage loan file next enters the underwriting stage. Loan underwriting is a process that determines whether the loan is a good risk for the lender.

IV . Loan Closing
If the loan is approved, the final stage in creating the mortgage loan is the funding and loan closing. In loan closing, the final details of the loan transaction are completed and the loan funds are disbursed. Most frequently, closing is handled by a title company or closing attorney.

V. Loan Servicing
Loan Servicing includes all activities that occur from the time a loan is closed until the time it is repaid. Servicing activities help ensure that the loan is repaid in a timely manner and that the lenders' legal claim to repayment of the funds is maintained.

About Us | Site Map | Privacy Policy | Contact Us | ©2003 Allied Home Mortgage Capital Corporation.