The adventure begins. As you enter into a loan process, be diligent in expressing your concerns with questions you need answers to. Finding out your plans, and the results you want is our priority.
The first step to getting a loan is to determine how much money you can borrow. In the case of buying a home this should happen before you begin looking at listings, so you don’t fall in love with something too far out of your range. By finding out what your budget is first you can avoid a bit of home shopping heartbreak.
We’ll figure out how much you can afford by asking you a few simple questions and using that information to calculate your buying power, based on standard lender guidelines.
The exact forms you need for a home loan depend on your situation. For example, someone who is self-employed will likely have to provide different forms than someone who is employed by a company.
Although the exact forms might vary, but depending on your unique situation, here are five documents you might need when applying for a home loan.
- Photo ID and SSC
- Tax Returns
- Bank Statements
- Pay stubs W-2s or other proof of income
- Executed sales contract or Deed
Although lenders conform to standards set by government agencies, loan approval guidelines vary depending on the terms of each loan. In general, approval is based on two factors: your ability and willingness to repay the loan, and the value of the property.
Once your loan application has been received we will start the loan approval process immediately. Your loan processor will verify all of the information you have given. If any discrepancies are found, either the processor or your loan officer will troubleshoot it to straighten them out. This information includes:
Income/Employment Check (If you choose an Income check loan, we have No income check loan available)
Is your income sufficient to cover monthly payments? Industry guidelines are used to evaluate your income and your debts.
What is your ability to repay debts when due? Your credit report is reviewed to determine the type and terms of previous loans. Any lapses or delays in payment are considered and must be explained.
Do you have the funds necessary to make the down payment and pay closing costs?
Is there sufficient value in the property? The property is appraised to determine market value. Location and zoning play a part in the evaluation.
In some cases additional documentation might be required before making a final determination regarding your loan approval.
A loan commitment is a formal letter from a lender stating that the applicant has met all of the qualifications for receiving a loan, and that the lender promises a specific amount of money to the borrower. Once you got your commitment, you can lock your rate ( You do have ability to lock your rate earlier, but we suggested to lock your rate after getting the commitment)
After your loan is approved, you are ready to sign the final loan documents. You must review the documents prior to signing and 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. The signing normally takes place in front of a notary public.
It normally takes about 1-2 hours to sign all the documents to close your loan.