1. Loan Application. Once you have reviewed our website - maybe talked to one of our mortgage professionals - and compared our rates and closing costs, you will want to complete an On-Line Application.  Before you start, you may want to review the Loan Application Info page which outlines the type of information that is required on the application.  The loan application takes about 10 minutes to complete and if there is information that you do not have readily available, you may pause and return later.  Once the loan application is complete you will receive a confirmation which will outline the next few steps of the process and provide a link to the Supporting Doc Checklist.  While we complete the next two steps, it is the perfect time to make sure you have carefully assembled all of the documents required on the checklist.

2. Credit Check. When your mortgage consultant receives your application (within minutes during normal business hours) he or she will review the information for completeness and then submit a credit inquiry to the three national credit bureaus.  They will then import any liabilities (debts) that you have into your application.  The credit report aids in two important ways: It provides your credit scores which are an important factor in determining the rates and options you qualify for. It provides a list of your current liabilities (debts) that are figured into your debt-to-income calculation. If you have questions about your credit report, please check out the Your Credit Report section of this site.

3. Pre-Approved. Unlike being pre-qualified, pre-approved means we have completed a credit inquiry, reviewed the credit report data, imported the data into your application, and submitted the entire application to one of the two national automated underwriting services for approval: Desktop Originator.  Fannie Mae's automated underwriting service Loan Prospector.  Freddie Mac's automated underwriting service The automated underwriting engines provide three critical answers: Credit approval.  The credit history and other aspects of your application, such as income and assets, meet the automated underwriting guidelines established by Fannie Mae or Freddie Mac. Loan program approval.  The loan program you have applied for falls within the parameters of Fannie Mae or Freddie Mac guidelines. Property approval.  The type, location and value of the property you are purchasing or refinancing meets Fannie Mae or Freddie Mac guidelines. Once your application is pre-approved, you will received a detailed email outlining the next steps in the application process. *Note: Pre-Approval is based on the information you provide on the application and your credit report. It is not a final loan approval. At the point of pre-approval, no supporting documentation has been collected, income and assets have not been verified, an appraisal has not been reviewed and lender due diligence has not been completed. See Submitted to Underwriting below.

4.  Interest Rate "Locked".  Once your mortgage application is pre-approved you are free to lock in the interest rate. There are several steps to lock in your mortgage interest rate and since its one of the most important steps of the process it's important that you take the time to understand how the process works. Check rates using the daily rate options spreadsheet Read our rate lock policy Pay the lock deposit Complete and submit the Rate Lock Request Form. You can find more details by reading Our Rate Lock Policy

5. Submit "Documents to Sign" and Supporting Documents.  When your mortgage application was pre-approved, a five-page document entitled Documents to Sign was posted to your personal loan center. Within two (2) business days of locking your interest rate, we must receive the Documents to Sign and supporting documentation.  Submitting Documents: To submit the Documents to Sign and supporting documentation,  use either the upload option in your personal loan center to upload electronic documents, or use the direct fax option to print a fax cover sheet that can be used to fax the documents. IMPORTANT NOTICE About Submitting Documents Within Two (2) Business Days of Locking: Once you lock your interest rate you will receive an email reminder that the "Documents to Sign" and supporting documentation are required within two (2) business days. That's because your complete application is due to underwriting within four (4) business days. If underwriting has not received your complete application within four (4) business days, your rate lock is reset to "Floating" and once your complete application is received and reviewed the rate will be re-locked at the higher of current rates or your original rate, plus .125% to points. Therefore it is absolutely imperative that you submit the "Documents to Sign" and supporting documentation within two (2) business days of locking your interest rate.

6.  Appraisal.  An appraisal, completed by a Licensed Residential Appraiser, documents the value of your property relative to recent, comparable sales in your neighborhood.  The cost of an appraisal for a primary residence, single family home is typically $405.  For a purchase transaction, the appraisal is ordered after the application and purchase contract are received and the lock deposit has been paid.  On a refinance transaction, the appraisal is ordered after the lock deposit has been paid and the interest rate has been locked. For more details, go to Getting an Appraisal.

7.  Title Search / Policy.  Concurrently with ordering your appraisal, we will order a title search and title policy binder from a licensed North Carolina residential closing attorney.  The closing attorney searches county property records to ensure no other party has a legitimate claim to your property and then submits his/her work to a title insurance company who issues a title insurance policy binder. The attorney represents numerous parties in a purchase transaction; the buyer and their agent, the seller and their agent, the lender and us.  On a refinance transaction he or she represents the borrower, the lender and us.  So the choice of the attorney is a coordinated one between all the parties.  Though the Real Estate Settlement Procedures Act (Regulation X) states that the lender, to protect its title interest in the property, can require the borrower to choose from an approved list, we choose to work with most real estate attorneys in North Carolina.  We do, however, maintain the right to refuse to use a particular closing attorney if their efficiency and automation standards do not comply with those of Carolina's Lending Source, Inc. For more details go to Why Title Insurance?

8.  Submitted to Underwriting.  Once we have received and reviewed your Documents to Sign, supporting documents and title policy binder, we submit a complete loan file to underwriting.  Your application will have previously been pre-approved via automated underwriting.  The underwriter's job is to validate the documentation required by the automated underwriting findings. The underwriter, as the lender's quality assurance representative, is responsible for applying stringent due diligence standards and may require additional documentation to support the borrower's income or assets. The underwriter complies with written guidelines and has the responsibility to determine if an application meets those guidelines. Therefore the ultimate decision to approve or decline an application rest with the underwriter. A full copy of the Fannie Mae underwriting guidelines go to the Fannie Mae Seller Guide.

9.  Approval - Conditional.  Once the underwriter has validated the automated underwriting findings, he or she will issue an underwriting approval.  The underwriter may ask that further documentation be provided or corrections be made to comply with underwriting guidelines.  This request is known as a condition and is very common, therefore the first iteration is typically a conditional approval, contingent on the conditions being satisfied.  When the conditional approval is issued, you will receive a very detailed email outlining the conditions and specifically addressing the documentation required to clear the conditions.  It is imperative that documentation to satisfy conditions be submitted as soon as possible so as not to delay your loan closing or jeopardize your rate lock.

10.  Conditions Satisfied.  The date that all conditions have been received from all parties and submitted to underwriting for review.

11.  Cleared to Close.  When the underwriter has reviewed and accepted the conditions, they will be cleared and a cleared to close will be issued.  Cleared to closed means that a closing package may be ordered and sent to the closing attorney so that he or she may prepare the HUD1 Settlement Statement.  The cleared to close must be typically be received three business days prior to closing.

12.  HUD1 Settlement Statement.  This document, prepared by the closing attorney, is used to itemize all charges to the borrower and seller for a real estate transaction. It gives each party a complete list of their incoming and outgoing funds.  Closing attorneys collect documentation throughout the loan process as the purchase contract, mortgage pay-offs, invoices for appraisals and inspections and insurance premiums.  Once the closing attorney receives the closing package from the lender, he or she will prepare the HUD1 Settlement Statement and then send it to your mortgage consultant for review.  We will review the form to ensure that the actual closing costs recorded on the HUD1 Settlement Statement align with those quoted on the Good Faith Estimate and then post a copy of your Personal Loan Center for review. For line by line instructions and a sample form, go to HUD1 Settlement Statement.

13.  Closing.  A real estate closing is usually held in the office of the closing attorney.  In attendance with be all parties involved in the real estate transaction; the sellers and their agent, the buyers and their agent, and the closing attorney.  Having already received a copy of the HUD1 Settlement Statement, you will be required to bring to closing any funds necessary in the form or a certified check.  The attorney will begin by reviewing the HUD1 Settlement Statement with all parties and once the sellers (in a purchase transaction) have handed over the keys, signed the HUD1 Settlement Statement and the Deed, they will be dismissed.  The closing attorney will then focus most of his attention on the borrower(s), going through each documents of the lender's closing package.  He or she will explain each document and obtain the appropriate signatures. The most prominent three documents that you will review and sign at the closing are the HUD1 Settlement Statement, the Promissory Note (promise to re-pay) and the Deed of Trust (in some states called the mortgage) which outlines the borrower's responsibilities to the lender with regard to the property and the lender's recourse in the event the note is not repaid according to the terms. All borrowers must attend the closing or be represented by a power of attorney.  Spouses must also attend even if they are not on the promissory note.  The spouse will sign the deed of trust acknowledging that a lien is being placed on a property to which he or she has an ownership interest. Remember, the closing attorney, among others, represents your interest in the real estate transaction and you are paying for his or her services.  So be sure to read and understand all of the documents that you sign, ask as many questions as you like and ask for a copy of every document.