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# A recipe made to order for real estate loans
- URL: https://www.smdp.com/a-recipe-made-to-order-for-real-estate-loans/
- Published: 2006-07-12T15:00:00.000Z
- Updated: 2026-10-25T00:21:07.000Z
- Author: Guest Author
- Tags: Opinion, Santa Monica, #archive-import

*Simples as 1,2,3*

*By MIKE HEAYN*

The process of a real estate transaction is similar to any recipe. There are specific ingredients needed in a specific order. Allow me to explain in more detail: An important part of a recipe, and of a real estate transaction, is planning. The first thing you want to do is contact a loan officer to discuss what type of loan or financing you need. The loan officer will provide you with a pre-approval letter showing you the biggest loan for which you qualify. Lastly, you will need to make sure you can make the payments.

Just like you need to prepare a recipe, you need to prepare yourself or at least know your credit score. Pulling your credit report may be nerve-racking, but do not worry, once you have the score you can remedy almost any problem. Lenders use three credit bureaus to get your credit report with scores that range from 500 to 850\. Scores at 720 and above are considered excellent. The three credit bureaus: Experian, Equifax and Trans Union will provide you a free copy of your credit, if you request it, once a year. Think of your credit report as a report card for adults. If you cannot make your Visa payment on time, the lender will wonder how you plan to make your mortgage payment on time. Lenders can work around a lot of problems except for poor credit. Here’s a tip — make sure your total revolving debt, such as credit cards and charge cards are below 45 percent of their maximum limits. For example, if you have a credit limit of $1,000, make sure you have not used more than $450 of it. Also, do not have a lot of people pull your credit before you get a loan. Every time someone pulls your credit, your score goes down a few points. If you are shopping for a loan, bring a copy of your credit report with you so your loan officer does not need to pull it.

GETTING STARTED Now that you have planned and prepped, it is time to get started. What you need first is an application. Most residential lenders use a standard application, known as a 1003 (pronounced “ten oh three”). In the last few years, a lot of effort has been put into simplifying loan applications. The trick to completing a loan application is to make sure you complete the financial section to the best of your ability, as this is one of the most closely examined sections. Today, you can do an application over the phone or Internet. Remember it is your loan officer’s job to assist you with a loan application. Therefore do not hesitate to ask them for help. Also, do not forget to provide any supporting financial information such as tax returns, W-2 forms, bank statements, etc.

BAKING Baking, or waiting, is the easy part of a loan process. Once you have submitted your loan application and all the requested documentation, it is a waiting game on your part. If you are wondering what goes on in the “oven” of the bank, allow me to open the “oven door” for you. The baking begins with the ordering of an appraisal. Once the appraisal is in, the loan goes to underwriting where an approval or commitment letter, showing you the loan dollars, happens. The commitment letter will lay out the loan terms and will expire after anywhere from one to four weeks.

SERVING The loan process is almost complete. Now you read and sign the loan documents,checking carefully to make sure all terms are as agreed, have the loan funded, documents recorded, close escrow, get the keys and move in.

Bon appétit. (Mike Heayn is a multi-family loan consultant. He (310) 428-1342 or e-mailed at For more information, log onto www.re101.net.)

*Originally published in the Santa Monica Daily Press print edition on July 12, 2006.* [Read the original PDF.](https://s3.us-east-1.amazonaws.com/smdp%5Fbackissues/071206.pdf?ref=smdp.com)