Get to know the loan process
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Meet with a loan officer to discuss your goals and current financial situation. Your loan officer will help to determine what loan amount and purchase price you can qualify for and what programs will be a good fit for you.
Receiving a pre-approval letter prior to looking at properties requires verification of your income, credit, assets and liabilities. It is recommended that you get pre-approved before you start looking for your new house so that you can:
Know your price range before you start looking
Be in a better position when negotiating with the seller (being pre-approved can help the seller be confident in your offer)
Close your loan quicker
Find Out How Much You Can Borrow
LTV and Debt-to-Income Ratios
Credit Scores are widely used by almost all types of lenders in their credit decision. It is a quantified measure of creditworthiness of an individual, which is derived from mathematical models developed by Fair Isaac and Company in San Rafael, California. Credit scores reflect the credit risk of the individual in comparison with that of general population. It is based on a number of factors including past payment history, total amount of borrowing, length of credit history, credit inquiries, and type of credit established.
Source of Down Payment
Lenders expect borrowers to come up with sufficient funds to cover the down payment and other fees payable by the borrower at the time of funding the loan. Generally, down payment requirements are made with funds the borrowers have saved. If a borrower does not have the required down payment available in cash, they may receive “gift funds” from an acceptable donor with a signed letter stating a number of things, including that the gifted funds do not need to be paid back.
Once you have had the opportunity to decide on a property with your realtor and put in an offer, the formal mortgage approval process will be set into motion.
Your loan officer will pull a credit report (if they did not do so prior) and request a specific set of documents from you that will be able to provide the underwriter with enough information to make an initial decision on your loan approval. Once you provide these documents, your loan officer will place your mortgage transaction with the lending partner who has the best terms on the program you both agreed on.
Once our lending partner has received our request to work with them on your loan, your loan will be moved into processing.
Our processing team will work with you throughout the remainder of the process to make sure that your mortgage loan is treated with priority and you will work with a single processor who will become another main point of contact.
Your processor will work with our lending partner to issue your first set of loan documents, including your Loan Estimate, so that you can review fees, see the initial terms of the program, and ask any questions that you may have.
At this point, your loan will be submitted to our lending partner for an initial review of your transaction.
Begin Loan Processing
Is your income sufficient to cover monthly payments for all your debt obligations, not just your mortgage?
Is there sufficient value in the property?
Fill out your loan application completely. You may use our online forms to expedite the process.
Respond promptly to any requests for additional documentation especially if your rate is locked or if your loan is to close by a certain date.
Do not move money into or from your bank accounts without a paper trail. If you are receiving money from friends, family or other relatives, please prepare a gift letter and contact us.
Do not make any major purchases until your loan is closed. Purchases cause your debts to increase and might have an adverse affect on your current application.
Do not go out of town around your loan's closing date. If you plan to be out of town, you may want to sign a Power of Attorney.
Following the underwriter's initial review of your documents, they will contact your processor with a list of additional items they need to see in order to make a final decision and approve your loan for closing. Some of these documents will need to come from you, and some will be gathered by your processor without needing your help, like the title of the home.
Your processor will review the request from the underwriter and reach out to you if they need anything.
When they have all the items requested by the underwriter back, they will submit them back to the underwriting team for review. This back and forth may need to happen a few times since providing the underwriter new documents can bring to light new information that was not known when the application was submitted.
When the underwriter has concluded that the documentation and information meets their guidelines and has no further questions, they will approve your loan for closing.
To close, your processor will help you coordinate with the title company to schedule your closing at a time and place that works for you. You may choose to go to the title company, but you can also have a mobile notary public meet you at a different place.
Before closing, you will need to speak with the title company and your processor to ensure that you have accurate information about how you will be bringing in your down payment.