Purchase Process
Make no mistake, there's a lot involved in getting a mortgage loan processed and approved . You wouldn't be here on our website if you could fill out a one-page application and get the best loan for you funded the same day. Simply put, we do most of the heavy lifting for you so you can concentrate on what's important -- preparing to move into your new home, investment planning, or planning for your next remodel.
There are four main steps involved in getting a mortgage loan. You'll see that we've made your part in them as easy as possible, and we do all the work! That's what we're here for.
Step one: determine how much you can borrow
This is a function of a couple things. How much of a monthly payment can you afford? Given your unique credit and employment history, income and debt, and goals, how much can you borrow? The first part is getting a rough idea of what the number will look like by using the calculators on our website. We'll also help you through different scenarios by asking a few simple questions. Based on standard lender guidelines, we'll get you a good idea of what kind of terms and loan program you can expect to benefit most from.
Step two: pre-qualify for your loan and apply now! We make it easy
This is where the rubber meets the road and you save the most money. It's time to complete the loan application. It couldn't be easier and you can do it online, right here on our website. You supply information about your employment, your assets, your residence history, and so on. You give us your permission to run your credit score. When we review all this information we give you a Pre-Qualification Letter. Handle it with care -- to a home seller, it's like a suitcase full of cash! Your realty agent will use your Pre-Qual (as they may call it) to make the best offer on the home you choose, and the seller knows you're pre-qualified. It gives you buying clout! And while you're picking out the home that's right for you, we're busy finding the loan that's right for you.
Step three: getting the loan approval
Once you've made an offer and it's been accepted, we'll order an appraisal of your new home. Once all verifications are received and all lender loan approval conditions have been met, the loan documents are ordered. There are always updated documents or even new requests that various banks and lenders will have. This is all part of the normal loan approval process. We endeavor to anticipate what these items will be and will keep you updated to date as we proceed.
Step four: your loan is funded
Your realty agent and the seller's will work together to designate an escrow/title company to handle the funding of your loan once it's approved. We'll coordinate with the escrow company to make sure all the papers your lender will need are in order, and you'll sign everything at the escrow/title company's office.
You've answered a few questions, given us some detailed information, applied online, and next thing you know, you're moving in! We're in the business of approving and closing mortgage loans, you're not -- so we do most of the work.
Things to avoid during the loan process
Many homeowners and new homebuyers make the mistake of applying for new credit, depleting their cash reserves or rushing out to buy things to furnish their new home as soon as the seller accepts their purchase offer or the lender pre-approves their loan. But, there are still a few major hurdles to overcome before the keys are handed out. Here are some things to avoid during the loan process to assure your transaction goes as smoothly as possible:
- Don't make an expensive purchase or apply for new credit!. It may be tempting to order that new sofa for your soon-to-be living room, but it's best to avoid making major purchases like furniture, cars, appliances, electronic equipment, jewelry, or vacations until after the closing. Purchasing with a store credit card or even one of your own credit cards could jeopardize your credit worthiness during the time it means the most. Using cash to purchase big items can also create a problem because many banks take into consideration your cash reserve when approving your mortgage.
- Don't get a new job. Lenders like to see a consistent job history. Generally, changing jobs will not affect your ability to qualify for a mortgage loan - especially if you are going to be making more money. But for some people, getting a new job during the loan approval process could raise some concern and affect your application.
- Don't switch banks or move money around. As your lender reviews your loan package, you will likely be asked to provide bank statements for the last two or three months on your checking accounts, savings accounts, money market funds and other liquid assets. To eliminate potential fraud, most loans require a thorough paper trail to document the source of all funds. Changing banks or transferring money to another account - even if its just to consolidate funds - could make it difficult for the lender to document your funds.
- Don't give a good faith deposit directly to the seller in a FSBO purchase. As a rule, your good faith deposit belongs to you, not to the seller, until the deal closes. Your FSBO seller may not know that your good faith funds should be applied to your expenses at closing. Get an attorney or other neutral party who can hold the deposit or put it in a trust account until you close on the home. Your purchase contract should dictate to whom the funds go should the transaction fall through.
- Don't disregard your lender's requirements. You may have been pre-approved for the loan but your work with the lender is far from over. In order to process your loan, you need to meet certain requirements. Your lender will need copies of your bank statements, W2s and other paperwork. It is up to you to get it to him or her as soon as possible. Failure to submit certain qualifying documents could cause you to lose your loan and the financing you need.
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