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The Loan Process

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The Loan Process
The Loan Process
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Step 1: Price Range

 

Home ownership is within many consumers' reach. And the first step toward finding the right mortgage is to determine how much you can afford to pay each month. This saves you time by allowing you to focus on homes in your price range. It can also help you plan other costs you can expect to pay, such as closing fees, escrow accounts, etc.

To compute your purchasing power, contact me to see how much house you can afford . I will maximize your mortgage options rather than just using a calculator.

 

Step 2: Loan Options

There are many different types of mortgages to choose from. Which one is right for you? That depends. When reviewing your options, you should consider your current financial picture, how your finances might change in the future, how long you intend to remain in the home, your tax benefits, and how comfortable you are with fluctuating mortgage payments.

There are 3 basic types of home mortgages:

1.      Fixed-Rate Mortgages: Security and Stability
Fixed-rate mortgages remain the most popular type. With these loans, the interest rate is fixed for the life of the mortgage, so your monthly payments never change.  Ask me more about the pro’s and con’s and how it might be the right/wrong choice for you.

 

2.      Adjustable-Rate Mortgages: Flexibility and Control
Adjustable-rate mortgages (ARMs) generally start out with an interest rate lower than a fixed-rate loan. This saves you money early on, and may help you qualify for a more expensive home. However, your rate is tied to a market interest rate. As the market rate goes up or down, your payments will also change at each scheduled adjustment period. (There are "rate caps" to limit the amount your mortgage can go up or down.)  Ask me to explain the pro’s and con’s and how it might be the right /wrong choice for you.

3.      Special Mortgage Programs: For Unique Borrowing Needs
I offer a variety of home financing options for customers with special considerations. These may include special credit needs, FHA or VA loans, low down payments options or affordable home loan programs.  Ask me more about the pro’s and con’s and how it might be the right/wrong choice for you.

 

Step 3: Get Organized

You've identified your price range and have learned about the mortgage options that may be right for you. Now it's time to gather all the information and supporting documentation you'll need to apply for a Pre Approval. Getting ready ahead of time will help the process move along quickly and smoothly for you.

Arrange your paperwork
Here are some of the documents you may need to prepare for the home financing process:

  • Your social security number (or proof of permanent residency)
  • Pay stubs for the last month
  • W-2 forms for the past two years
  • Bank statements for the past 2-3 months
  • 1 to 2 years of Federal tax returns
  • A signed contract of sale (if you've already chosen your new home)

Be sure to ask about additional requirements if you're self-employed, or buying a co-op or condominium

Order a copy of your credit report
Your credit report will be ordered by us as part of your application process; however, if you review your credit report and address any errors before you apply, you can avoid potential delays during processing.

Remember, when assessing your financial picture, be as honest and thorough as possible. That's the best way for me to structure your loan and secure the mortgage that's right for you. There are mortgages for just about every buyer and situation.


Step 4: Get Pre Approved

If you've already found the home you want to buy, you can skip ahead to Step 5 and apply for your mortgage directly. If not, consider getting Pre Approved for your mortgage before you start shopping for a home. Getting Pre Approved will give you a significant advantage while you're shopping for a home.

Ask about my Pre Approval Passport-to-Purchase®. With a Passport-to-Purchase® Pre Approval, you get written confirmation of a maximum loan amount - so you know just how much you will be able to finance. This confirmation can help increase your bargaining power with the seller, since it's like having "cash-in-hand." And, once you find the perfect home, your transaction should close more quickly.

Passport-to-Purchase® Program also allows you to:

  • Choose the mortgage that's right for you
  • Lock in an interest rate for 60 or 90 days*
  • Receive a Pre Approval l certificate within 3 business days
  • Shop for your home with confidence
  • Rate lock begins at date of Pre Approval application.

  • A small fee for Pre Approval rate lock may apply.

 

Step 5: When You Apply

 

Once your offer has been accepted by the seller, I will assist you and your Realtor with the details of closing (including a satisfactory property appraisal).

You can expect personalized and convenient service from start to finish.

Here is what happens to your application after it is completed:

  1. I review your information and contact you to confirm your intent to apply and requests the required documentation to begin processing your application. Then the information is transferred to the Loan Processor to verify that all documentation needed to process the loan has been collected. We will order a formal appraisal that estimates the current value of the property. In addition, a survey of the property may be required, to verify that the property boundaries as stated in the purchase agreement are correct. A title search and title insurance are required to ensure that there are no other liens on the property. We will order these services on your behalf. Once documentation is complete, everything is transferred to the Underwriter.
  2. The Underwriter usually has no direct contact with you but he or she is the one who reviews all of the documentation and makes the decision to approve or deny your loan. You are then notified of the decision and if approved, can set a closing date.
  3. Once the Underwriter's decision is made, the information is transferred back to the Loan Processor. If approved, the Loan Processor will contact you, request any further documentation, and set a closing date. When complete, the information is given to the Closer to assemble the "closing package" - the finalized loan documents. The Loan Processor makes sure that all fees and other payments to be made at closing are documented accurately, and verifies information with the title agent. In most cases, he or she will also establish an escrow account for payment of necessary insurance and real estate taxes. Finally, the Loan Processor authorizes the mortgage funds for disbursement.

Note: You should get a Home Inspection prior to closing.  A home inspection performed by a professional, is a visual examination of the readily-accessible areas of a home to provide an accurate evaluation of the home's condition at the inspection. This evaluation is presented to the buyer in a comprehensive report so buyers are fully informed of the home's condition prior to purchase. While a home inspection is not required, it is highly recommended.

 

Note: Avoid making any large purchases, career movements, or liquidating of assets during a Home Purchase. Your loan may be impacted and may compromise your loan approval prior to closing.

 

Step 6: Close the loan

 

Congratulations! You're about to become a homeowner. The "closing" is when the finalized loan documents are signed, and the mortgage funds are disbursed.

Here are some things you can do ahead of time to ensure a successful closing:

  • Fulfill any conditions specified by the Underwriter at the time of your loan approval.
  • Obtain homeowner's insurance. This required insurance protects you against loss or damage due to theft, fire, or certain weather-related hazards. In some areas, it may also be necessary to obtain flood insurance.
  • Resolve title questions. If your title search turned up other liens on the property, these will need to be resolved before closing can occur.
  • Conduct a final walk-through of the home to ensure any agreed upon repairs have been completed by the seller.
  • Review the final estimates of your closing costs.
  • Prepare a certified check or money order - not a personal check - to cover your down payment and closing costs.
  • Make sure you can meet the conditions of your mortgage commitment.

At the closing, you'll receive and review some very important documents. This is not the time to be shy! If you have questions about the paperwork, just ask. And if you spot an error, say so - and don't sign the document until the issue is resolved.

 

Congratulations and enjoy!!

 

Here are some documents you'll receive or review at your closing:

  • HUD-1 Final Settlement Statement
    This is an itemization of all funds and costs paid by the buyer and seller either at or prior to closing. If you ask, you have a right to review the HUD-1 a day in advance of closing.
  • Truth-In-Lending (TIL) Disclosure
    This document provides important information about your loan. It includes the APR, finance charge, amount financed, total of payments, and payment schedule.
  • Deed of Trust or Mortgage
    This document states that Chase receives a lien on your property as security for your loan.
  • The Note
    The note is your binding legal agreement to make payments to Chase according to the terms of your mortgage.
  • The Keys
    The symbol of your new home ownership. Congratulations!

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