Getting
qualified before you begin shopping can help you to target a property
you can afford. It also gives you more credibility when presenting
an offer.
When
buying a house, you may get pre-qualified or pre-approved. We can
typically pre-qualify you over the phone in a few minutes. A pre-qualification
is not as beneficial as a pre-approval where you have to go through
a more rigorous process which includes verification of your credit,
income, assets and liabilities. It is highly recommended that you
get pre-approved before you start looking for a house.
This
puts you in a stronger position when you are negotiating with the
seller, because the seller knows that your loan is already approved.
Helps
you close quickly, since no approval is needed if your loan is already
pre-approved.
Loan
programs and rates:
Think
about how long you plan to keep the loan. If you plan to sell the
house in a few years you may want to consider an adjustable or balloon
loan. On the other hand, if you plan to keep the house for a longer
time, you may want to look at some fixed loans.
Understand
the relationship between rates and points. Points are considered to
be prepaid interest and are tax deductible. Each point is equal to
one percent of the loan. Example: 1 point on a $150,000 loan is $1,500.
The more points you pay, the lower the rate you will get.
Compare
different programs. Shopping for a loan can be difficult. With so
many programs to choose from, each of which has different rates, points
and fees, it's hard to figure out which program is best for you. That's
where an experienced loan officer can help you make a decision that's
best for you.
If
you are buying or refinancing a home:
If
you are salaried: provide two years W-2 and one month of pay stubs
OR if you are self-employed: provide two years tax returns and a Year
To Date profit and loss statement.
If you own rental property, please provide rental agreements and two
years tax returns.
If
you wish to speed up the approval process, please also provide two
months bank statements for each bank, your last statement for stock
and mutual fund accounts. Also, provide recent copies of any stock
brokerage or IRA/401K accounts that you may have.
Provide
a copy of divorce decree if applicable.
If
you are applying for a home equity loan:
If
you are salaried: provide two years W-2 and one month of pay stubs
OR if you are self-employed: provide two years tax returns and a YTD
profit and loss statement.
If
you own rental property, please provide rental agreements and two
years tax returns.
Provide
a copy of the note on your first mortgage. This will normally be found
in your closing loan documents.
Provide
a signed letter explaining what you plan to do with the proceeds.
Provide
a copy of divorce decree if applicable.
Obtain
loan approval:
Once
your loan application has been received we will start the loan approval
process immediately.
This
involves verifying your:
- Credit
history
- Employment
history
- Assets
including your bank accounts, stocks, mutual fund and retirement
accounts
- Property
value
Based
on your specific situation, additional documents or verifications
may be required. To improve your chances of getting a loan approval.
Fill
out the loan application completely:
Respond
promptly to any requests for additional documents. This is especially
critical if your rate is locked or if you plan to close by a certain
date.
Do
not make any major purchases. Do not buy a car, furniture or another
house till your loan is closed. Anything that causes your debts to
increase might have an adverse affect on your current application.
Do
not move money into your bank accounts unless it can be traced. If
you are receiving money from friends, family or other relatives, please
contact us.
Do
not go out of town around the closing date. If you do plan to be out
of town when your loan is expected to close, you may sign a power
of attorney, to authorize another individual to sign on your behalf.
Close
the Loan:
After
your loan is approved, you will be required to sign the final loan
documents. This will normally take place in front of a notary public
at a Title Company. Be prepared to:
Bring
a cashiers check for your down payment and closing costs if required.
Personal checks are normally not accepted.
Review
the final loan documents. 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.
Sign
the loan documents:
Your
loan will normally close shortly after you have signed the loan documents.
On refinance and home equity loan transactions federal law requires
that you have 3 days to review the documents before your loan transaction
can close.
