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An
Overview of the Loan Process
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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.
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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:
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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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