1. The Application: The key to the loan process. Using verifiable information you provide us, we work to obtain approval of your loan.
2. Ordering Documentation: We order a full credit report, verification of employment, verification of funds to close, mortgage or landlord ratings, and any other necessary supporting documentation. If you have a property already identified, then an appraisal report is ordered and a preliminary title report is requested as well.
3. Good Faith Estimate and Truth In Lending Disclosure: We are required to prepare for you a Good Faith Estimate and Truth In Lending Disclosure within 3 days of the application submission.
4. Loan Processor and Loan Submission: After receiving the necessary supporting documents, the loan processor works to verify and reconcile the information and assure that the application is complete.
5. Loan Submission: When the loan package is complete, the Loan Processor submits the loan package to the underwriter for approval. The underwriter reviews your credit payment history and credit score, job stability, income ratios, down payment, closing costs, cash reserves and property appraisal.
6. Loan Approval: Once the loan is approved, we are ready to close the loan, providing the property is ready and has met the terms of the sale contract. At this time, the title company is informed of the loan approval status.
7. Funding: After all parties (You and the Seller) have signed the closing documents, they are returned to the to the lender for review of the complete package. If there are no further issues, then funds are wire transferred to complete the transaction.
8. Recordation: When the title company receives funds from the lender, the necessary documents are delivered to the county recorder’s office. Recording is the time that your purchase is complete. All funds are distributed to the involved parties and the transaction is officially closed.
9. You now own your new home.
• The property is the security for the loan. The lender will require an appraisal by a certified fee appraiser to assure that there is sufficient collateral. The underwriter will look for marketability, condition and value of the home.
• Most loan programs require that funds be or must have been in your account for 3 months. A minimum of 5% down payment usually needs to be your own funds. The remainder can be a gift by a relative, providing a gift letter and bank statement showing the ability to give is also provided.
• Income ratios are based on your gross monthly income (before taxes). Bonuses, overtime, part-time or self-employment income must be likely to continue and is averaged over the last two years. The Principle, Interest, Taxes, and Insurance (P.I.T.I.) (plus Mortgage Insurance if applicable) is divided by the gross monthly income to get the top ratio. Take the PITI and all debts are added together and divided by the gross monthly income get the bottom ratio. Ratios needs vary based on the Loan To Value (LTV) or how much down payment is made.
• Special programs can allow you to purchase with very little money, less than perfect credit, and income that is not verified.