MORTGAGE PROCESS

The Loan Process in 4 easy to understand steps

Pre-approval: Apply online in person, or by phone. We will Pre Approve you within 15-20 minutes. We will send you a letter of pre-approval that you can give to your real estate agent or to the sellers.

Loan Processing: After discussing your goals and giving you some different options, we will send you (by email, fax or US mail) an application to review and sign. A Title Binder, Appraisal & Survey will be ordered. Once we have received the necessary documentation (pay stubs, bank statements, rental history, etc....) from you, we will check to ensure everything is in order for expedient final loan approval, then we will send your package to the Lender.

Final Approval: The loan is then reviewed by an Underwriter for approval. At times, they may ask for further documentation, or clarification. After the Underwriters give final approval, your loan documents are drawn, and closing instructions are sent to the title company.

Close/Funding: This is where you will meet at the Title company to sign final documents. After closing, it takes 1-4 hours to fund purchases and 1-3 days for refinances.

Documents you'll need to submit to the Lender:

One month's pay stubs
Two month's bank statements (all pages, all accounts- checking, savings, 401k, IRA, etc.). If you have quarterly statements, just send your most recent one.
Last two year's W-2's.
Rental/mortgage history

Other considerations:

You may have to prove funds to close are available.
You may have to prove Cash Reserves. (2 month's mortgage payments)
Contact a homeowner's insurance agent and line up a policy.

What Lenders want to know about you…….

1. Your credit score

This tells them about your ability to repay your debt, and your willingness to repay debt in a timely manner.
The higher your score, the lower (better) your interest rate.

2. Your Income/Your Job History

Lenders want to know how much money you make now, and what have you have made in the past 2 years. If you are self-employed, you need to have been in the same line of work for the last 2 years.
We have many Lenders with programs for self-employed or commission/sales jobs, or a job where your pay may vary month to month. (typically for folks who write off much of their income)

3. Your Debt-to-Income Ratio (DTI)

If you add up all of your monthly bills and add in a proposed mortgage payment, what percentage of your gross income will that be?
For example: take the minimum monthly payments on your credit cards, add any car payments, student loans, etc., then divide by your gross monthly income. Better Lenders (with lower rates) will want you to have a 38-42%DTI ratio, other (sub-prime) Lenders will allow you to go up to 50-55% DTI

4. Your Cash for Closing Costs and Reserves

Do you have enough cash for closing costs?
Do you have at least 2 monthly mortgage payments in an asset account? You may show 401k or IRA-they just want to know that you have 2 months payments saved.

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