An overview of the loan process
What information will be needed for the application
Five ways to make the loan process go faster
Should you talk to a mortgage professional before house hunting?
How much can you afford?
Buydown options
Title Information
An overview of the loan process
Make no mistake, there's a lot involved in getting a mortgage loan. You wouldn't be here on our website if you could fill out a one-page application and get the best loan for you funded the same day. What we do is do most of the heavy lifting for you, so you can concentrate on what's important -- preparing to move into your new home, saving money, or making plans for your home equity check.
There are four main steps involved in getting a loan. You'll see that we've made your part in them as easy as possible, and we do all the work! That's what we're here for.
| Step one: determine how much you can borrow |
This is a function of a couple things. How much of a monthly payment can you afford? And given your unique credit and employment history, income and debt, and goals, how much will a lender loan you? The first part you can get a rough idea of by using the calculators on our website. We'll also help you through different scenarios by asking a few simple questions. Based on standard lender guidelines, we'll get you a good idea of what kind of terms and loan program you can expect to benefit most from.
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| Step two: pre-qualify for your loan |
This is where the rubber meets the road and you save the most money. You supply information about your employment, your assets, your residence history, and so on. We get your permission to run your credit score. When we review all this information we give you a Pre-Qualification Letter. Handle it with care -- to a home seller, it's like a suitcase full of cash! Your realty agent will use your Pre-Qual (as they may call it) to make the best offer on the home you choose, and the seller knows you're pre-qualified. It gives you buying clout! And while you're picking out the home that's right for you, we're busy finding the loan that's right for you.
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| Step three: apply now! We make it easy |
Once you've made an offer and it's been accepted, it's time to complete the loan application. It couldn't be easier, and you can do it online, right here at our website. When the time is right, we'll order an appraisal of your new home.
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| Step four: your loan is funded |
Your realty agent and the seller's will work together to designate an escrow/title company to handle the funding of your loan once it's approved. We'll coordinate with the escrow company to make sure all the papers your lender will need are in order, and you'll sign everything at the escrow/title company's office.
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You've answered a few questions, given us some detailed information, applied online, and next thing you know, you're moving in! We're in the business of mortgage loans, you're not -- so we do most of the work. Doesn't that make sense?
What information will be needed for the application (and how it's kept private)
Anything you submit over our website is 100 percent, fully secure. And we never, ever share it with anyone except by permission -- that is, if you're giving us information you want us to use to get you the best loan, we use that information to tell mortgage lenders about you and convince them to loan you money. In turn, those mortgage lenders are bound by federal law to keep your information secure.
Here is a list of the information mortgage lenders will use to consider your loan application.
Social Security Number, for borrower and co-borrower if any
Employment History
For the last two years, employment dates, addresses, salary.
Current pay stubs or W-2 forms.
Check and Savings Accounts and Certificates of Deposit
Location of bank accounts, account numbers and balances;
Address of bank if out of town
Last 3 months' statements
Stocks, Bonds, and Investment Accounts
Broker's name and address, description of stocks, bonds, etc.
Last 3 months' statements or copies of stock certificates
Life Insurance Policies
Insurance company, policy number, face amount, cash value, if any
Retirement Plan
Approximate vested interest value
Copy of latest statement
Automobiles
Make and model of automobiles, their resale value
Other Assets
Market value of personal and household property
Liabilities and Other Non-Mortgage Debt
Creditors names, addresses, account numbers
Monthly payments and balances
Other income information you may need |
If you're self-employed
Two years tax returns, profit and loss statements, both company and personal if separate.
Current balance sheet and profit and loss statement if more than two months into the new fiscal year, signed by CPA.
If you have income from:
Commission
Overtime
Bonus
Partnership
Rental Property
Trust
Notes Receivable
Interest/Dividends
You'll need two years' personal federal tax returns
If employed in family business
Personal federal income tax returns and all schedules for the past two years
If divorced or separated
Complete executed divorce decree and settlement agreement
Payment history of alimony/child support over the past 12 months, if it is a financial obligation.
If you choose to have this be considered as part of your income (you don't have to), be prepared to provide 12 months canceled checks or bank statements reflecting income deposits.
Name and address of all mortgage lenders for the past 24 months, account numbers, monthly payments and balances
If you've sold your home but not closed:
A copy of the sales contract
If you've sold your home, closed, and you will use the proceeds for your new down payment:
A copy of the HUD-1 Uniform Settlement Statement
Name, address and phone number of landlords for the past 24 months
Purchase sales contract or offer to purchase and all addenda
Furnish contract with original signatures of buyer and seller
If a source of your down payment is a gift:
Name, address and relationship of donor.
Gift funds will be verified in both the donor and recipient's accounts.
Note: Not all loan programs allow gifts to be part of your down payment.
For FHA Financing
Evidence of Social Security Number and photo identification
For VA Financing
DD214 and Certificate of Eligibility
For Construction/Perm Loan
Signed construction with cost breakdown, builder plan and specifications
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Five ways to make the loan process go faster
We should say that "working with us" is the first way! When you let us help you find the loan that's right for you, you truly are taking advantage of some of the area's best technology and expertise to get you a loan decision and funding on your loan quickly.
But here are five "other" ways you can speed up the process of getting a mortgage loan:
| 1. Have everything ready and in one place. Elsewhere on our website, you'll find a list of things you might need in support of your mortgage application. If you get them all together and keep them in a safe, portable place like a special pouch or folder, you can cut down on time spent rooting around for things we may need. Also, you'll help cut down on your own anxiety and confusion. |
2. Be honest and complete when you fill out your application. "Fudging" your employment or residence history or omitting open credit accounts you'd rather not have considered doesn't increase your chances of getting a favorable loan. In 100 percent of cases, it makes it harder, and take longer.
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| 3. Respond promptly to requests for additional information. During processing, we or the lender considering your loan may need additional information. Provide it as soon as you get the request, or return the call as soon as you get the message. |
4. Be prepared to explain derogatory items in your credit report. This is really part of number 2 above. If you had an illness or a divorce where you missed or made late payments, or you have other instances of late payments or delinquencies on your credit report, be prepared to explain them. Be honest, and don't be nervous! The loan processor isn't judging you, they're trying to fill in all the blanks in their paperwork.
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| 5. Let the appraiser in! The appraisal is one of the lengthiest parts of the mortgage loan process. Studies have shown that the single biggest factor in appraisal "lag time" is the appraiser's inability to reach the homeowner to make an appointment. If you're refinancing and the appraiser calls to make an appointment, make it as soon as convenient for both of you. |
And remember that the appraiser doesn't want to buy your house. He or she will say what the house is worth clean and tidy and in reasonable repair, even if you have some dirty laundry on the laundry room floor or dirty dishes in the sink. Cleaning doesn't get you a higher appraisal! Letting the appraiser in as soon as possible gets you a loan faster, though. |
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Should you talk to a mortgage professional before house hunting?
Absolutely! Even if you haven't so much as picked out houses to visit yet, it's important to see your mortgage professional first. Why? What can we do for you if you haven't negotiated a price, and don't know yet how much you want to borrow?
When we pre-qualify you, we help you determine how much of a monthly mortgage payment you can afford, and how much we can loan you. We do this by considering your income and debts, your employment and residence situations, your available funds for down payment and required reserves, and some other things. It's short and to the point, and we keep the paperwork to a minimum!
Once you qualify, we give you what's called a Pre-Qualification Letter (your real estate agent might call it a "pre-qual"), which says that we are working with you to find the best loan to meet your needs and that we're confident you'll qualify for a loan for a certain amount.
When you find a house that catches your eye, and you decide to make an offer, being pre-qualified for a mortgage will do a couple of things. First, it lets you know how much you can offer. Your real estate agent will help you decide on an appropriate offer, but being pre-qualified gives you the confidence to know you can follow through.
More importantly, to a home seller, your being pre-qualified is like you walked into their house with a suitcase full of cash to make the deal! They won't have to wonder if they're wasting their time because you'll never qualify for a mortgage to finance the amount you're offering for the home. You have the clout of a buyer ready to make the deal right now!
You can always use the calculators available on our site to get an idea of how much mortgage you can afford -- but it's important to meet with us. For one thing, you'll need a Pre-Qualification Letter! For another thing, we may be able to find a different mortgage program that fits your needs better.
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How much can you afford?
Deciding how much house you can afford is a personal decision.Many factors come into play.How much can I borrow? How much can I put toward my down payment? What size monthly payment can I afford?
There are no black and white answers to these questions. Its a matter of give and take. If you plan on a 30 year mortgage, you can probably make a lower down payment (or perhaps no down payment at all) and still manage the monthly payments. If, on the other hand, you plan on a 15 year mortgage, youll probably want to make a larger down payment to keep your monthly payments in line with what you can afford.
How large a down payment can I make?
Many buyers look at their cash on hand as their only source for their down payment. This simply is not the case. One way to fund or partially fund a down payment is by using a gift. Parents, grandparents and other family members are often eager to help by making a cash gift toward the purchase of your home.
There are also down payment assistance charities that can help you. And, of course, if you are selling a home, the equity youve built up can be applied to your down payment.
But these are not your only options. We can help you explore all your down payment options, including low down payment and 100% mortgage financing options that might be right for you.
What size monthly payment can I afford?
When determining what size monthly payment you can afford, youll want to consider what other monthly expenses you have. Tangible expenses such as car payments, day care and utility bills, all play a role in how large a monthly payment you can afford.
There are also the intangible expenses or lifestyle expenses that youll want to consider. Things such as dining out, travel and when you buy your next car can effect how much you can afford. Are you willing to curtail or delay some of these expenses in order to afford a larger monthly payment?
How much can I borrow?
This is a question youll want to get answered before you begin your home search. This is something that were here to help you with. Our mortgage calculators will help you see how your down payment, monthly payment and the amount you borrow are all interrelated.
We can answer any questions you may have about the mortgage process. But the best way we can help is by getting you pre-qualified for a mortgage loan. To get started, simply complete the form below to let us know a good time to contact you. We look forward to helping you buy your dream home. |
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Buydown options
A buydown is a type of financing where the buyer or seller pays extra points (also called discount points) to reduce the interest rate on a loan. Buydowns make it easier to qualify for a loan because they lower a loan's interest rate. They can also allow you to buy more house for your money.
There are generally two types of buydowns: a permanent buydown and a temporary buydown. A permanent buydown lets you pay extra points to get a low interest rate over the life of your loan.
A permanent buydown can be paid by the seller or the builder as an incentive to finalize a sale by creating lower monthly payments. Sellers can also benefit from assisting with a buydown with a difficult to sell property or during slower market conditions. It increases the buyer’s ability to qualify for a loan, therefore, allowing the home to be sold quicker. Plus, a buydown offer is usually less than a price reduction on the home.
In a temporary buydown, you prepay interest in exchange for a lower rate during the early years of a loan. The most common temporary buydown is called 3-2-1, meaning the mortgage payment in years one, two and three is calculated at rates 3 percent, 2 percent and 1 percent, respectively, below the rate on the loan. On a 2-1 buydown, the payment in years one and two is calculated at rates 2 percent and 1 percent below the loan rate. And on a 1-0 buydown, the payment in year one is calculated at 1 percent below the loan rate.
A temporary buydown can be a benefit to a buyer whose current income is low but anticipates that it will increase during the next two years. First-time homebuyers who need to purchase all of the furnishings that go into a new home may also find a temporary buydown appealing.
Holding Title
Before you reach the closing day, you will want to make a decision as to how you will "hold title" to the property. This decision has legal, tax and estate planning ramifications. Therefore, it may be prudent to consult an attorney or certified public accountant (CPA).
The following information is supplied for informational purposes and should not be relied upon as legal definitions.
Buying Alone
- Sole Ownership
- A single individual who has not been legally married.
- An unmarried individual who was married and is now legally divorced.
- A married individual who wishes to acquire title in his or her name alone. At the time of closing, the spouse of the buyer will be required to specifically disclaim or relinquish his or her right, title and interest to the property.
- Living Trust
A living trust is created while an individual is alive and gives the individual control of the distribution of his or her estate. The individual transfers ownership of his or her property and assets into the trust.
Buying with Others
- Tenancy in Common
Enables each partner in the property to sell, lease or will to his/her heirs that share of the property belonging to him/her.
- Who can take title? Any number of individuals.
- Ownership Division: Any number of interests, equal or unequal.
- Who holds title? A separate legal title to his undivided interest is held by each co-owner.
- Possession: Equal right of possession.
- Joint Tenancy
Property owned by multiple individuals where if one of the owners dies, the remaining owners acquire the share of the deceased owner automatically.
- Who can take title? Any number of individuals.
- Ownership Division: Interests cannot be divided.
- Who holds title? There is only one title to the whole property.
- Possession: Equal right of possession.
- Community Property
Property owned equally between a husband and wife. Each must sign all agreements and documents of transfer.
- Who can take title? Only a husband and wife.
- Ownership Division: Interests are equal.
- Who holds title? Similar to title being in a partnership, title is held in "community."
- Possession: Equal right of possession.
Additional Ways to Hold Title
- Corporation
A corporation is a legal entity, created under state law, consisting of one or more shareholders but regarded under law as having essentially the same as those of an individual. The entity has continuous existence until it is dissolved according to legal procedures. Land owned by a corporation cannot be attached for personal debts or judgments rendered against any of its shareholders.
- A Partnership
A partnership is an association of two or more persons who can carry on business for profit. A partnership may hold title to real property in the name of the partnership with partners having an equal or an unequal interest in the property.
- A Trust
A trust is an arrangement whereby legal title to property is transferred by the grantor (or trustor) to a person called a trustee, to be held and managed by that person for the benefit of the people specified in the trust agreement, called beneficiaries.
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