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Real Estate

2006-04-01 13:20:00

The mortgage loan process

ANSWER:  The first item is:1. Application.  As a rule, the more accurate your application is, the faster and more efficiently your loan is approved. Information that is needed for your application is as follows: • Your address for the past two years • Names and addresses of your employers for the past two years •  Your most recent pay stub • W-2 forms for the most recent two years •  Two most recent statements for savings and checking accounts • Names, addresses, and account numbers for all loan and credit accounts • Addresses and loan information for all real estate owned • Homeowner's insurance agent's name, phone number, and address • Deposit for credit report fees, appraisal, etc. 2. Employment and Income. We want to be sure that your income and future mortgage payments will be a comfortable match for you. In most cases your employment will be verified by reviewing your most recent W-2 and pay stub. If you are self-employed, own your own business, or receive other income in addition to base wages, you will be asked to provide copies of your personal and business income tax returns for the last two years. 3. Assets. To verify the source of funds for your down payment and closing costs, we review your two most recent account statements. If you have just recently moved the funds, the previous account must also be verified. Verification may also be satisfied by a copy of bank statements, stock statements, or closing papers on the sale of a previous home. 4. Credit Report. A credit report will confirm your credit balances, monthly payments, and your payment history for current loans, paid loans, and charge accounts. This can be done right from our office while you're applying. If there are large differences between this report and your application, we will contact you. In addition, the payment history of your current residence will be verified with your mortgage holder or landlord. 5. Interest Rates. Interest rates change frequently, so you'll need to decide when to "lock-in" your interest rate. This can be done at any time throughout the loan process. You can lock rates and fees for a variety of time periods, but your terms may go slightly higher if you request a rate lock for a longer time period. Your loan officer will explain your options. 6. Appraisal. The home you are financing will be appraised by one of the lender’s approved appraisers. This provides an opinion of the home's market value for use in evaluating your loan request. The appraisal is not a warranty of the absolute value or of the condition of the home. A home that appraises for less than the sales price or that needs repairs can cause delays in the financing process. 7. Title Insurance. Title insurance protects the bank against loss resulting from legal claims against the property being purchased. The title insurance company reviews public records and reports the results to us. Claims may need to be satisfied before the sale of the property and funding of your loan can be completed. 8. Loan Approval. After we receive the necessary information, your loan file is reviewed by an underwriter. The basics for approval of your loan are: • The market value of the property • The amount of your down payment applied to equity • The percent of your income used to make monthly housing and debt payments • Sufficient cash reserves to cover the unexpected in your life • The stability of your income 9. Closing. After your loan is approved, your loan goes to "closing." An escrow account is set up in your name. You will be asked to deposit your down payment and closing costs, and sign your loan documents. These documents make the purchase and transfer of the property legal. After you sign the loan documents, they are sent to the county courthouse for recording. The day these documents are signed, funds for your loan are disbursed by the lender. This is referred to as the loan's "closing date." Then  its time to move!!