First we will talk about what you would like to do. Are you buying a house or refinancing your existing home? How much is the home worth? How much will you need to borrow? This will determine your loan to value ratio. How long do you think you will own the property? Will you be living in the property? Will there be a co-borrower, etc?
Then we will talk about your income (and your co-borrowers). How much do you earn? Where do you work? Do you receive a W-2 form or are you self employed? How long have you been at the job? You will usually need two years of employment information and documentation.
And finally we will talk about your credit. How much debt do you have and what is your payment history? I will then pull your credit report to see your credit score.
All of this information will determine the best loan product for you. Closing costs and fees will also be discussed at this time.
It is important to remember that most guidelines are not completely carved in stone. Each transaction is looked at on a case-by-case basis, so even if you come up a little short in the income area, a high credit score or strong cash position may make up for it. It’s my objective to find the best loan solution every time.
I have over 40 lenders to choose from. Each has it's own specialties and based on your goals and situation, I will find the best options and let you know the rates for each. I will even put it in writing.
We will discuss mortgage programs, rates and fees to determine your best options.
Something you need to think about very seriously is how long you plan to keep the property. If you plan to sell the house in a few years, an adjustable rate mortgage (ARM) or a balloon loan may make sense. If you plan to keep the house for a longer period, a fixed rate loan may be more suitable.
When you've decided on which program you like best, I will take an application fee from you over the phone. At this point we can lock in the rate whenever you decide to. To lock in your interest rate, please call me (DO NOT EMAIL!). Since rates can change based on changes in the financial markets, we prefer to treat your lock request with the utmost of urgency.
This can be done by fax. Documents must be complete and legible. All bank and investment statements must contain all pages, even if left intentionally blank.
Documents usually needed for a typical loan:
Copy of the fully executed purchase contract (or the Hud-1 for your home in the case of a Refi)
The last two years W2’s (for each applicant)
Pay stubs for most recent 4 weeks (for each applicant)
Most recent 3 months bank statements for each of your bank accounts (all pages please)
Most recent 401k / IRA / Pension statement(s) (all pages please) (for each applicant)
Recent mortgage statement OR PURCHASE CONTRACT
Declarations page from your homeowner’s policy (this is the page that summarizes your insurance coverage).
Copy front and back of driver’s license.
In addition to above...
If you are self employed:
2 years of both business and personal tax returns
YTD profit and loss statement and balance sheet
If you are divorced:
Complete signed copies of all divorce decrees and separation agreements including any stipulations or modifications.
Proof of receipt of child support payments for the last 12 months.
If you have rental property:
Provide copies of current leases
2 years of tax returns including schedule E.
For an FHA loan:
Social Security Card
For a VA loan:
VA certificate of eligibility
If you are requesting cash-out, you may need to provide a "Purpose of Refi" letter explaining what you intend to use the net proceeds for (we have a form for this).
If you are not a US citizen, you will be asked to provide a copy of your green card and/or an explanation of your present status with the INS. In many cases, this may result in a higher down payment requirement and/or a more limited product selection.
Finally, if you are applying for a home equity loan, you will need to provide a copy of the note on your current first mortgage, as well as a copy of the most recent statement on any secondary financing you may have at this time.
The application is the nucleus of the loan file and usually gets completed between day one and day five of the loan process. I will complete this industry-standard form by telephone or in person. Applicable supporting documentation is typically requested at this time. After the information is entered and the application is printed, each applicant will sign it, along with several other forms that will explain your rights and obligations. You will also receive a Good Faith Estimate (GFE) and accompanying Truth-In-Lending Statement (TIL) within 3 business days of the completed and signed loan application.
Once your application has been submitted, the processing phase begins. We order an appraisal and the escrow/title information. Certain information on the application, such as bank deposits and loan payments/balances are then verified. If you have any credit derogatories, such as late payments, collections and/or judgments, the processor may request a written explanation from you. The processor then examines the appraisal and title report to see if either requires further investigation. If so you will be contacted for more info/documentation. If not, a complete loan file is assembled and submitted to underwriting.
During this part of the process you may be contacted by someone on our team for more information or documentation.
Once the processor has put together a complete loan package with all verifications and documentation, the file is sent to the lender. The underwriter (for the lender) is responsible for determining whether the loan meets the underlying investor's requirements and/or if more information is needed prior to issuing an approval. If so, the loan is suspended and the borrower is contacted by the loan officer or processor to request additional documentation. If the loan is acceptable as submitted, an approval is issued.
Once the loan is approved and any/all prior to doc conditions have been satisfied, the file is transferred to the closing department and the final loan documents are prepared. The loan officer or processor notifies the parties involved and schedules a tentative signing date.
Once the docs have been signed by the borrower(s), a request for funding on a specific date is submitted to the lender. Once all funds are in place, the transaction is recorded and ownership conveys. In the case of a refinance, the old loan is paid and the new deed of trust is recorded.
At the closing the borrower should:
Bring a cashier's check (or investigate proper wiring procedures) for the net amount needed to close (consult your escrow officer for details). Personal checks are normally not accepted and may delay the closing until the check clears.
Provide a paid policy or confirm that there is adequate proof of hazard insurance. If you haven't been informed of what you need to provide, please ask either your Loan Officer or Processor. This is the most common problem that delays a closing.
Review the final loan documents to make sure that the interest rate and loan terms are what you agreed to. Verify that your name, social security number, street address and mailing address is accurate.
Sign the loan documents and provide 2 forms of identification (one with photo).
After the documents are signed, the escrow officer returns the documents to the lender for examination and requests a funding date/time. Once the loan has funded, the title company release a recording package to the county recorder's office. Once the deed of trust has been recorded, the escrow officer issues a Final Settlement Statement to the parties and issues all remaining disbursements (ie: net proceeds to the seller, commissions to the real estate brokers; third-party fees, payoffs and/or net proceeds to the borrower if it's a refinance).
A typical mortgage transaction takes 15 to 30 business days to complete. However, thanks to new automated underwriting systems, turn-around times have greatly improved. Please contact me today to discuss your home loan needs.
The loan process
(More documentation may be needed)
We will help you get the best loan at the lowest cost, with quick & easy closings.
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