The Loan Process

Organize Your Documents

A properly organized application will ensure a smooth transaction. This checklist will help you prepare your file:

1. Complete and sign the loan application, Good Faith Estimate, and all disclosures.

2. If you are salaried: provide W-2's for the previous two years and one month of paystubs. If you are self-employed, provide tax returns for the previous two years, including all schedules, and a YTD profit and loss statement. Please include all K1 statements.

3. Please provide bank statements for the most recent three months, and recent 2 statements for stock, mutual funds and IRA/401K accounts. Be sure to include all pages.

4. If applicable, provide a copy of your divorce decree and settlement agreement detailing all Alimony and Child Support income.

5. If you are NOT a US citizen, provide a copy of your green card (front & back). If you are NOT a permanent resident provide a copy of your H-1 or L-1 visa. If you are a US Citizen, please provide a copy of Photo ID.

6. If you are applying for a home equity line of credit or loan (second loan), also include your first mortgage note. (This should be with your closing loan documents.)

Get Approved

Getting approved before you extend on offer can help you understand how much you can borrow.

When buying a home, you should obtain a pre-approval. Pre-approval requires a more rigorous process, including verification of your credit, income, assets and liabilities. Being pre-approved will:

1. Inform you of your maximum affordable home value, and save you from previewing properties outside your price range.

2. Put you in a stronger negotiating position with the seller, because the seller will know your loan is pre-approved.

3. Help you close quickly, since your loan is pre-approved and your mortgage broker can shop the loan with several lenders. 

Shop Loan Programs and Rates

Speak to your broker to understand what Lenders are offering:

1. Think about how long you plan to keep the loan. If you plan to sell your home in a few years, you may want to consider an adjustable rate or balloon loan. If you plan to keep your home for a longer time, you may want to consider a fixed rate loan.

2. Understand the relationship between rates and points. Points are considered prepaid interest and may be tax deductible. Each point is equal to 1 percent of the loan. For example 1 point on a $150,000 loan is $1,500. Traditionally, the more points you pay, the lower your rate. Your mortgage broker can review your options.

3. Compare different loan programs. There are many different programs available, and education is the key. Consult an experienced mortgage broker who can help you find a loan program that best fits your short- and long-term plans.

Obtain Loan Approval

Once your loan application has been received, we will start the loan approval process. This involves verifying your:

- Credit history

- Employment history

- Assets including your bank accounts, stocks, mutual fund and retirement accounts

- Property value

To expedite your loan approval, please:

- 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 or open new lines of credit.

- Do not move money into any bank accounts unless it can be sourced.  If you are receiving gift 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.

- Notify your mortgage broker before applying for any other credit, including credit cards, personal loans or even with another mortgage company. Some loan programs have strict guidelines regarding your credit score. Credit inquiries may lower your credit score and may have an adverse affect on your loan approval.

Close the Loan

After your loan is Cleared To Close, you should 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 the accuracy of the name and address on the loan documents.

- Sign the loan documents. The notary will require that you have your picture ID with you.

- On refinance and home equity loan transactions, federal law requires that you have three days to review the documents before your loan transaction can close.