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Five Steps to the Mortgage Loan Process
1. Organize necessary Documents
- Salaried employee's:
- Two years W-2's & two months pay stubs.
- Self employed:
- Two years tax returns & Year to Date P&L
- Two months of prior bank statements for all accounts.
- Recent copies of stocks, IRA's, or 401k's or personal financial statements.
- For Home Equity loans you will need a copy of the note on your Primary mortgage.
- For cash out refinancing you'll need a letter stating what your intention for the Proceeds.
- If you own a rental property we'll need a rental agreement and two years worth of tax returns.
- If you are not a US Citizen, you will need a copy of your green card (front & back). If you're not currently a US resident please present one of the following H-1, L-1 visa, or ITIN number.
2. Prequalification
- Before purchasing a house you want to find out how much of a house that you
will qualify for. This is a process that will involve the verification of your
credit, assets, income, and your liabilities. Prequalifacation is an important
process when purchasing a home.
3. Apply for a loan
4. Approval
- Once the loan application has been completed we'll begin the loan approval
process. The following are the steps involved in your approval.
- Your credit history.
- Assets including Stocks, mutual funds, retirement funds and bank statements.
- Property value by appraisal.
- Employment History
- Based on each borrowers situation additional documents may be required to help
your chances of getting a loan for approval. Here are some suggestions that will
help speed up the process.
- Fill out all necessary information on the loan application.
- Quick and timely responses from the borrowers for additional documents. This is particularly important for those who have locked rates or if you need to close in a timely manner.
- Make sure you are available at the time of your closing. If you need to be out of town at the time of your closing be sure to sign "power of attorney" so your attorney is authorized to sign all paperwork for you.
- Do not move or transfer funds into your accounts unless these funds can be traced to where they came from.
- Do not make any major purchases like a car or furniture or other loans. This may cause your debts to increase and may have ramifications on your loan application.
5. Close
- Once your loan is approved you'll sign all the final documents. This usually takes place with a Notary Public present. You'll need to bring the following.
- Your Drivers license.
- Bring a "Certified Check" for the closing costs or down payment.
- Review all loan documents to assure all is agreed to.
- Verify all names and address to insure accuracy.
- Sign all documentation.
- Loans will typically close shortly after you've signed all necessary documentation.
- With home equity loans and refinances federal law requires a three day recision time
period for review before funds will be dispersed.
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