Posted on: 25th May, 2009 02:00 am
whats the difference between approval of loan and disbursement of loan
When the lender approves you for the loan, it's known as approval of the loan. Before approving the loan, the lender will check your credit score, income and other required financial details. When bank pays the loan to the customer, it is known as disbursement of the loan.
disbursement may in phased manner. it depends upon your request & actual progress of work. Your mortgage company will conduct inspection before disbursement.
it depends on what type of mortgage.
if you are referring to a 203k, or a construction to perm, you would be approved first, and a dispersement schedule will be created. The lender would disperse funds at different stages of the building and or rehad project.
if this is a regular purchase, dispersement is at the closing table.
Refi's, normally there is a 3 day waiting period for dispersement, because the borrower has 3 days to cancel the loan if they want.
if you are referring to a 203k, or a construction to perm, you would be approved first, and a dispersement schedule will be created. The lender would disperse funds at different stages of the building and or rehad project.
if this is a regular purchase, dispersement is at the closing table.
Refi's, normally there is a 3 day waiting period for dispersement, because the borrower has 3 days to cancel the loan if they want.
Financial background is taken into consideration for approving loan agreement. After enquery mortgage is paid to you that is nothing but disbursement.