FAQ.

1. 1. Pre-qualification

      The loan pre-qualification process is a review of your income, credit and assets to determine how much loan you may qualify for. This will help direct you and your real estate agent in your home search by giving you an idea of your maximum price point. You may wish to go a step further and get a pre-approval. We will gather some of your loan documentation, from which we will complete a detailed review, and run automated underwriting. This is a good tool for letting sellers know you are both a serious and qualified buyer when making an offer.

   2. Purchase Offer

      If purchasing, find a property, and make an offer. It is always beneficial to have a pre-qualification or pre-approval letter, especially in a competitive real estate market.

   3. Mortgage Application

      If you have not already completed a loan application for pre-approval, that will be the next step.  For the loan application, each borrower on the application will need:

      • name, address, date of birth and social security number
      • marital status and list of dependent(s)
      • income and employment history for two years
      • assets/investments account information
      • debt/liabilities account information including alimony, child support, IRS payments, etc.
      • property information for any real estate owned
      • legal and financial declarations
      • subject property address

      
      

   4. Loan Disclosures

      Once your application has been completed, our team will prepare your loan disclosures, including the loan estimate. You will review and e-sign all documents, and return them with the items needed to process your loan (see general list in FAQs), ideally within 24-48 hours.

      The loan estimate is an important document, and we must deliver it to you within three days of application. This document includes all of the financial information pertaining to your loan: loan amount, interest rate, estimated monthly payment, closing costs, any credits from seller/lender, deposits, etc. It is important to review this and all other loan documents. If you find any errors or omissions, be sure to bring it to your loan advisor’s attention immediately. Incorrect information could cause delays later in the process.

   5. Loan Processing

      One of our qualified loan processors will receive and review all of your loan documentation and order any additional verifications (e.g., employment verification) as needed. If any documentation is missing, they will contact you for more information. When all required documentation is received, your loan will be submitted to the underwriting department for loan approval.

      Your appraisal will also be ordered at this point. At the time of order, you will receive an invoice by email for payment of the appraisal. We will not receive the completed appraisal without your prior payment.

      Title will also be ordered from the attorney or title company. This makes sure you get a clear title to the home and sets up the process for closing/settlement.

   6. Underwriting

      During underwriting, an underwriter will check your eligibility, confirm the information you/we have provided, and determine whether you are approved. This stage is very thorough, and it may include a conditional approval, where you’ll need to send in more documentation, prior to full approval.

      When a loan is conditionally approved, it assumes that the loan will be approved after you have satisfied the conditions set forth by the underwriter. Often it is simply waiting for remaining documentation that may not have been available at the time of submission (e.g., appraisal, proof of all funds to close). Other times it can be that the underwriter requires more documentation to support a particular item (e.g., questions or documentation about income, assets, or liabilities).  This sometimes includes providing new documentation (e.g., supporting documentation for a large deposit or a letter to explain something in the file).  While some borrowers find the request of more information to be frustrating,  many borrowers encounter conditions, and it’s important you are ready and willing to to resolve any conditions in order to keep closing on schedule.

      Once you have satisfied all underwriting conditions, you will receive the clear to close. At this stage, we are ready to prepare final paperwork for closing.

   7. Closing Disclosure

      The initial Closing Disclosure (CD) must be signed a minimum of  three (3) business days before closing. The CD gives you another estimate of what your final mortgage payment will be and a close estimate of your cash to close. While we make every effort to give you an accurate estimate of what you will see on the day of closing, it is possible that things will change minimally prior to closing. Please keep in mind that it is very important that you sign the initial CD as soon as you receive it. Should there be any signing delays, it could impact the closing date. Signing does not imply a commitment on behalf of the borrower or lender.

   8. Closing

      On closing day, you will generally go to an attorney or title company office to complete all of the paperwork. There is often a good deal of documentation to be reviewed and signed, so this can take an hour or longer.

      You will be expected to take valid photo identification. Prior to closing, you will wire any funds needed for closing to the closing attorney/title company, if applicable, based on the estimate on the Closing Disclosure. You should bring a checkbook to closing in case of any incidental changes.

      If you are buying a home, you will receive the keys to your new home! If you are refinancing, it will be an additional three business days before the loan will disburse and any cash-out, if applicable, will be available for payment to you.

Simply stated, reserves are the amount of money you have left in your bank account(s) after your loan closing. Some loan programs require verification of reserves in addition to funds needed for closing, as it impacts your perceived ability to make payments. Your loan advisor will discuss the requirements with you during the application process, if applicable to your loan.

While having good credit may help you get a better interest rate, imperfect credit, bankruptcy or foreclosure does not necessarily prevent you from getting a mortgage. Talk to a loan advisor to discuss the details of your situation.

Closings generally take place at an attorney’s office or title company. Each borrower on the loan must take a valid photo ID to closing. Any money required for closing will need to be a wire transfer (contact your loan advisor or closing agent for details) or certified funds payable to the law firm or title company. It’s always helpful to take a checkbook in case of any incidental changes. Your loan advisor will notify you in advance if any other items are required.

A prequalification is a getting a general idea of how much loan you can afford. It often relies self-reported information from the prospective borrower pertaining to credit, income, and assets. A pre qualification is less reliable than a preapproval. To obtain a preapproval, your credit, income, and asset information will be verified by requesting and reviewing documentation, and the information is validated by an automated underwriting system.

While completing a prequalification is a good first step in the process, a preapproval shows real estate agents and home sellers that you are both serious and qualified to make a purchase.

PMI, or private mortgage insurance, is a type of mortgage insurance that may be required if you have a conventional loan. PMI protects the lender—not you—in the event you stop making payments on your loan. In general, for loans without 20% down payment or 20% equity, PMI is required.

The annual percentage rate (APR) is a measure of the cost of borrowing money. The APR is often higher than the the quoted interest rate, as it expresses the interest rate, any points, mortgage broker fees, and other various charges that you pay to get the loan. The interest rate is simply the cost you will pay each year to borrow the money, expressed as a percentage.

While each loan is different and may require more or less documentation, the standard items we will need to process your loan include:

• A copy of each applicant’s photo ID and, if not a U.S. citizen, a copy of the green card or work visa
• Income documentation for wage earner applicants to include most recent 30-days paystubs & most recent year’s W-2(s).
• Income documentation for self-employed to include most recent two-years tax returns. Business tax returns may be required, as applicable.
• Assets documentation to include most recent two-months bank statements for all accounts needed for down payment funds and reserves.
• If you own any rental property, current signed rental agreement for each property
• Mortgage statement(s) for all real estate property owned.
• Copy of property tax bill and homeowner’s insurance declarations page for any real estate owned (if not escrowed).
• Copy of most recent homeowner’s association (HOA) bill or coupon for all real estate owned, if applicable. A letter to the contrary will be required if there is no mandatory HOA on any property.
• Contact information for homeowner’s insurance agent/company on subject property.