WE WILL BE THERE FOR YOU FROM THE INITIAL LOAN APPLICATION TO FUNDING. OTHER THAN OUR AGGRESSIVE RATES, WE ARE DIFFERENT FROM OUR COMPETITORS BECAUSE WE HANDLE EACH CLIENT’S LOAN APPLICATION WITH CARE AND PERSONALIZED APPROACH.
We will evaluate your application, then send you a pre-qualification letter. A pre-qualification is not an approval. If you need a pre-approval or approval letter, ask specifically for such request. We offer loan approval prior to the property selection, but only if requested for such approval.
The following explanation is intended for residential mortgage loans application (home loans). Commercial loans application may follow a slightly different approach.
Step 1: Pre-Application
Before the actual mortgage loan process begins, we gather information about your income and debts and figure out how much you can afford to borrow. We have many different mortgage products available. For that reason, you have flexibility to choose program that align with your mortgage goals; and that will also be a factor in the pre-application possible loan amount. We will then order a credit report to make sure that you can meet the basic qualifications for the available programs. Afterward, we then start your loan through automated underwriting system.
Step 2: Loan Application
Once you are pre-qualified, we will prepare a formal loan application. This process will include: verifying employment, income, bank deposits, and gather any other documents needed for processing. This process may be done face-to-face, via mail or electronically.
Step 3: Processing
We review your credit report, verify your debts, and payments history. If there are late payments, collections for judgments, or other concerns; we may ask for a written explanation from you. A written explanation will help us clear up any of these types of issues. We order a property appraisal and review for value. Title and homeowner's insurance is ordered. A complete package is put together for final approval.
Step 4: Underwriting
Underwriting is where we make sure your home loan package must meet all your mortgage program requirements. At this point, we have gathered most of the information. However, in the underwriting process, underwriter may need additional questions and it is important that any requests be answered quickly.
Step 5: Pre-Closing
Your loan has been cleared through underwriting and is being prepared to move to closing. Before this can happen, we must meet the requirements of Portfolio investor, Freddie Mac, Fannie Mae, and other investors or lenders. your final Credit report will show any new debts, credit inquiries or increased balances/payments on current debt. If any new and/or additional debt or obligations are identified prior to closing, the loan may be re-underwritten to determine if the loan qualifications are still met. A final confirmation of employment is also completed within 10 days of your closing date (for residential loans).
Step 6: Closing
Your loan has been cleared for closing, the package completed and a closing date and time are scheduled. The closing typically takes place at a title or escrow company.
Now you can say: I know mortgage!
Mortgage Glossary:
Down Payment – This is a sum paid up-front to make up the difference between the purchase price and the mortgage amount. Down payments usually are 5 to 20% of the sales price on loans. Lower down payment requirements may apply for FHA, VA and USDA loans.
Equity – Equity is calculated by the amount of principal you have repaid on your mortgage, plus any appreciation in your home’s value. Any other existing liens will be subtracted, lowering the total equity figure.
Buy-down – This is a buyer incentive in which the lender subsidizes your mortgage by lowering the interest rate. During the first few years, the loan payments will be lower. Buy-downs generally last from one to five years.
Annual Percentage Rate – The Annual Percentage Rate (APR), is the cost of your credit expressed in terms of an annual rate. You may be paying points and other closing costs, the APR can be compared to other loans for which you may have applied and give you a fair method of comparing price.
Foreclosure – Also known as a repossession of property, this occurs when the lender or the seller legally forces a sale of a property because the borrower has not met the terms of the mortgage.
Closing Costs – Closing costs include the loan origination fee, discount points, appraisal costs, and any other charges associated with the legal transfer of property.
Good Faith Estimate – A list that estimates your loan’s closing costs, any fees you will pay before closing, and any escrow costs you will encounter when purchasing a home. You will receive your Good Faith Estimate within three days after you apply for a loan. It’s designed to present your loan’s costs in an easy to read format, and help you make sound decisions when shopping for a loan.
Mortgage Insurance – Insurance that protects lenders against losses caused by a borrower’s default on a mortgage loan. MI typically is required if your down payment is less than 20% of the purchase price.