Loan Process
Let us simplify your mortgage process
Find out how much you can borrow
The first step in obtaining a loan is to determine how much money you can borrow. In case of buying a home, you should determine how much home you can afford even before you begin looking. By answering a few simple questions, we will calculate your buying power, based on standard lender guidelines.
Your best option is to get pre-approved for a loan which 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 you:
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Look for properties within your range
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Be in a better position when negotiating with the seller (seller knows your loan is already approved)
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Close your loan quicker
Factors for being Pre-Qualified or Pre-Approved
LTV and Debt-to-Income Ratios | FICO Credit Score | Self Employed Borrower | Source of down payment
LTV and Debt-to-Income Ratios
Loan-To-Value (LTV) ratio is the maximum amount of exposure that a lender is willing to accept in financing your purchase. Lenders are usually prepared to lend a higher percent of the value, even up to 100%, to creditworthy borrowers. Another consideration in approving the maximum amount of loan for a borrower is the ratio of monthly debt payments (such as auto and personal loans) to income. Rule of thumb states that your monthly mortgage payments should not exceed 1/3 of your gross monthly income. Therefore, borrowers with high debt-to-income ratio need to pay a higher down payment to qualify for a lower LTV ratio.
FICO Credit Score
FICO 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. FICO scores reflect credit risk of the individual in comparison with that of general population. It is based on several factors including past payment history, total amount of borrowing, length of credit history, search for new credit, and type of credit established. When you begin shopping around for a new credit card or a loan, every time a lender runs your credit report it adversely effects your credit score. It is, therefore, advisable that you authorize the lender/broker to run your credit report only after you have chosen to apply for a loan through them.
Self-Employed Borrowers
Self-employed individuals often find that there are greater hurdles to borrowing for them than an employed person. For many conventional lenders, the problem with lending to the self-employed is documenting an applicant’s income. Applicants with jobs can provide lenders with pay stubs, and lenders can verify the information through their employer. In the absence of such verifiable employment records, lenders rely on income tax returns, which they typically require for 2 years.
Source of down payment
Lenders expect borrowers to come up with sufficient cash for the down payment and other fees payable by the borrower at the time of funding the loan. It is generally expected that these funds be borrower’s own saving, although a borrower may receive non-returnable gifts towards down payment and other loan fees.
Step 2
Select the Right Loan Product and Program
Home loans come in many shapes and sizes. Deciding which loan makes the most sense for your financial situation and goals means understanding the benefits of each of them. There are many products to choose from, which can be overwhelming. We are here to help you understand which loan product will be best for your financial circumstances.
Loan Products
Step 3
Apply Online
Complete Secure Application: Takes about 10 minutes to complete and is required for “Pre-Approval”. (Recommended)
Short Application: Takes 2-5 minutes to complete. You will be contacted once your application is submitted.
Step 4
Your loan processing begins
Although lenders conform to standards set by government agencies, loan approval guidelines vary depending on the terms of each loan. In general, approval is based on two factors: your ability and willingness to repay the loan and the value of the property.
Once your loan application has been received we will start the loan approval process immediately. Your loan processor will verify all of the information you have given. If any discrepancies are found, either the processor or your loan officer will troubleshoot to straighten them out. This information includes:
Income/Employment Check
Is your income sufficient to cover monthly payments? Industry guidelines are used to evaluate your income and your debts.
Asset Evaluation
Do you have the funds necessary to make the down payment and pay closing costs?
Other Documentation
In some cases, additional documentation might be required before making a final determination regarding your loan approval.
Credit Check
What is your ability to repay debts when due? Your credit report is reviewed to determine the type and terms of previous loans. Any lapses or delays in payment are considered and must be explained.
Property Appraisal
Is there sufficient value in the property? The property is appraised to determine market value. Location and zoning play a part in the evaluation.
In order to improve your chances of getting a loan approval
- 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, sign a Power of Attorney to authorize another individual to sign on your behalf when your loan is expected to fund.
Step 5
Close your loan, yay!
After your loan is approved, you are ready to sign the final loan documents. You must review the documents prior to signing and make sure that the interest rate and loan terms are what you were promised. Also, verify that the name and address on the loan documents are accurate. The signing normally takes place in front of a notary public.
There are also several fees associated with obtaining a mortgage and transferring property ownership which you will be expected to pay at closing. Bring a cashiers check for the down payment and closing costs if required. Personal checks are normally not accepted. You also will need to show your homeowner’s insurance policy, and any other requirements such as flood insurance, plus proof of payment.
Your loan will normally close shortly after you have signed the loan documents. On refinance loan transactions federal law requires that you have 3 days to review the documents before your loan transaction can close.
Our Core Values
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Honesty, Integrity, and Competence
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Assist our clients through any roadblock that may arise
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Help you reach your homebuyer dreams
