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LOAN
PROCESS |
     
If
you are buying or refinancing a home the following
information will aid you in the process.
Organize
your documents
As
part of the process you will need to document certain
information about your financial situation. Our loan
officers will contact you to discuss the exact items
necessary for your loan but you may wish to prepare by
organizing your documents ahead of time.
- 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.
- If
you wish to speed up the approval process, please also
provide three months bank statements for each bank,
stock and mutual fund account.
- Provide
recent copies of any stock brokerage or IRA/401K
accounts that you may have.
- If
you are requesting a cash out refinance please provide
a letter explaining what you plan to do with the
proceeds.
- Provide
copy of divorce decree if applicable.
- If
you are NOT a US citizen provide us with a copy of
your green card (front & back), or if you are NOT
a permanent resident provide us with your H-1 or L-1
visa.
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Get
Qualified
Getting
qualified before you apply for a loan can help you
understand how much you can borrow.
When
buying a house you may get pre-qualified or
pre-approved. You can typically get pre-qualified over the
phone or on the Internet 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 will
help you:
-
Find out the maximum house you can buy, so you don't
waste time looking for properties that are out of your
price range.
- 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 your loan is already
approved.
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Shop
loan programs and rates
To
shop for a loan you will need to:
- 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 fixed loans.
- Understand
the relationship between rates and points.
Points are consider to be prepaid interest and are tax
deductible. Each point is equal to one percent of the
loan. So for 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 chose from, each of which have different
rates, points and fees, its 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.
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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.
- Please
provide a copy of the note on your 1st mortgage. This
will normally be found in your closing loan documents.
- Please
provide a signed letter explaining what you plan to do
with the proceeds.
- Provide
copy of divorce decree if applicable and you wish to
use alimony to qualify for the loan.
- If
you are NOT a US citizen provide us with a copy of
your green card (front & back), or if you are NOT
a permanent resident provide us with your H-1 or L-1
visa.
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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.
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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. 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.
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