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Step
1: Organize your documents
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If
you are buying or refinancing a home
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1.
If you are salaried: provide two years W-2 and one month of
paystubs OR if you are self-employed: provide two years tax
returns and a YTD profit and loss statement.
2. If you own rental property, please provide rental agreements
and two years tax returns.
3. If you wish to speed up the approval process, please also
provide three months bank statements for each bank, stock
and mutual fund account.
4. Provide recent copies of any stock brokerage or IRA/401K
accounts that you may have.
5. If you are requesting a cash out refinance please provide
a letter explaining what you plan to do with the proceeds.
6. Provide a copy of divorce decree if applicable.
7. If you are NOT a US citizen, provide us with a copy of
your green card (front & back), or if you are NOT a permanent
resident provide us with your H-1 or L-1 visa.
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If
you are applying for a home equity loan
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1.If
you are salaried: provide two years W-2 and one month of paystubs
OR if you are self-employed: provide two years tax returns
and a YTD profit and loss statement.
2. If you own rental property, please provide rental agreements
and two years tax returns.
3. Please provide a copy of the note on your first mortgage.
This will normally be found in your closing loan documents.
4. Please provide a signed letter explaining what you plan
to do with the proceeds.
5. Provide a copy of divorce decree if applicable.
6. If you are NOT a US citizen, provide us with a copy of
your green card (front & back), or if you are NOT a permanent
resident provide us with your H-1 or L-1 visa. |
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Step
2: Get
Qualified
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Getting
qualified before you apply for a loan can help you understand
how much you can borrow.
When
buying a house, you may get pre-qualified or pre-approved. You
can typically get pre-qualified over the phone or on the Internet
in a few minutes. A pre-qualification is not as beneficial as
a pre-approval where you have to go through a more rigorous
process which includes verification of your credit, income,
assets and liabilities. It is highly recommended that you get
pre-approved before you start looking for a house. This will
help you: 1.
Find out the maximum house you can buy, so you don't waste
time looking for properties you can not afford.
2. Puts you in a stronger position when you are negotiating
with the seller, because the seller knows that your loan is
already approved.
3. Helps you close quickly, since your loan is already approved.
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Step
3: Shop
loan programs and rates
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To
shop for a loan you will need to:
1. Think about how long you plan to keep
the loan. If you plan to sell the house in a few years you may
want to consider an adjustable or balloon loan. On the other
hand, if you plan to keep the house for a longer time, you may
want to look at fixed loans.
2. Understand the relationship between rates and points. Points
are considered to be prepaid interest and are tax deductible.
Each point is equal to one percent of the loan. So for example
1 point on a $150,000 loan is $1,500. The more points you pay,
the lower the rate you will get.
3. Compare different programs. Shopping for a loan can be difficult.
With so many programs to choose from, each of which has different
rates, points and fees, it's hard to figure out which program
is best for you. That's where an experienced loan officer can
help you make a decision that's best for you.
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Step
5: Obtain
Loan Approval
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Once
your loan application
has
been received we will start the loan approval process immediately.
This involves verifying your:
1. Credit history
2. Employment history
3. Assets including your bank accounts, stocks, mutual fund
and retirement accounts
4. Property value
Based on your specific situation, additional documents or verifications
may be required. To improve your chances of getting a loan approval:
•
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.
Do not buy a car, furniture or another house till your loan
is closed. Anything that causes your debts to increase might
have an adverse affect on your current application.
• Do not move money into your
bank accounts unless it can be traced. If you are receiving
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.
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Step
6: Close
the Loan
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After
your loan is approved, you will be required to sign the final
loan documents. This will normally take place in front of a
notary
public. 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 that the name and address on the
loan documents are accurate.
• Sign the loan documents.
Your
loan will normally close shortly after you have signed the
loan documents. On refinance and home equity loan transactions
federal law requires that you have 3 days to review the documents
before your loan transaction can close.
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