The Loan Process

1. Organize your documents
2. Get Pre-qualified or Pre-approved
3. Decide on a Mortgage Program
4. Find a Home
5. Complete the Loan Process
6. Close and Fund
   

Organize your documents

If you are buying a home or refinancing, you will need to provide the mortgage professional with the following documents:

• Copy of most recent W-2s, if salaried
• Copy of pay stubs covering the last 30 days
• Copy of most recent bank/investment statements (all pages)
• If divorced - copy of the fully executed divorce decree
• Copy of driver’s license or other photo identification
• If self-employed, commissioned, or own rental real estate - copy of most recent signed personal tax return, including all schedules, W-2s, 1099s, K-1s, etc.
• Other documents as required for specific loan programs

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Get Pre-qualified or Pre-approved

Before you begin looking for a home, you should get pre-qualified or pre-approved for a mortgage loan.

• Pre-qualification - You can typically get pre-qualified over the telephone or on the internet in a few minutes. Pre-qualification is the preliminary process of determining whether you have enough cash and sufficient income to meet the qualification requirements for a requested loan. It is based on verbal information you provide the mortgage professional, and may not take into account your credit history. This process is not especially beneficial since most real estate agents and sellers will not accept it as an indication that you can afford a home.
• Pre-approval - Mortgage loan pre-approval is the recommended approach. This process includes most of the steps of a full loan approval, including completion of the loan application, providing the required documentation, and signing required loan disclosures. The mortgage broker will then evaluate your income, employment, assets, and credit history and provide a Conditional Approval Letter, if warranted. The pre-approval will state that it is subject to your finding a property which meets the loan parameters, and is subject to an acceptable appraisal and title search. Also, it is important that your credit worthiness and financial position do not change materially prior to closing.

1. Find out the maximum price of home you can buy, so you do not waste time looking for properties you cannot afford;
2. Puts you in a stronger position when you are negotiating with the seller, because the seller knows you are already approved for a loan;
3. Helps you close more quickly, since most of the loan process has already been completed.

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Decide on a Mortgage Program

In conjunction with your loan application, you will need to decide on a mortgage program. If you plan to sell in a few years, you may want to consider an adjustable rate mortgage or a balloon loan. On the other hand, if you plan to keep the house for a longer time, you may want a fixed rate loan. Or, you may want to consider an interest-only loan so that you can qualify for a larger home, have lower required monthly payments, and have additional funds for other investments.

There are also zero down, 80/20, 80/15/5, no cost loan programs, to name a few.
With so many loan programs available, you should contact one of our experienced mortgage professionals to analyze your situation and recommend the most suitable program to fit your needs.

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Find a Home

After you have obtained loan pre-approval, you can begin looking for a home with the assistance of your professional real estate agent. When you have found the house of your choice, you will execute an Earnest Money Contract or Purchase Agreement detailing the terms of your purchase.

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Complete the Loan Process

If you are already pre-approved for a loan, the mortgage professional will update your loan application to reflect the terms of your purchase and provide updated disclosure forms for your signature. You will need to pay the application fee to cover the mortgage broker’s expense for the property appraisal, credit report, etc. If you are not pre-approved for a loan, you will need to complete a loan application and provide all of the required documentation to the mortgage professional to begin the approval process.

The mortgage professional will contact the designated title company to order a title search/commitment and will also order a new survey, unless the seller has an existing, accurate survey which is acceptable to the title company.

When all of the required documents are assembled, the mortgage professional will provide the complete loan package to the underwriter for final review and approval. All underwriting conditions will have to be satisfied before the loan is closed and funded.

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Close and Fund

After your loan is finally approved, you will be required to sign the final loan documents. In Texas, this is usually done at the designated title company.

Prior to closing, a Settlement Statement will be prepared by the title company listing all of the charges for the buyer and seller. These will be reviewed by your Asset Mortgage professional to make sure they are accurate. You will then be provided with a copy for your review. If you have any questions, your mortgage professional will endeavor to answer them and resolve any issues prior to closing.

You will need to bring a cashiers check for the designated amount to closing. The cashiers check should be made payable to the title company. You will also need to bring your driver’s license or other acceptable photo identification.

At closing, the title company representative will discuss the loan documents with you before you sign them. Be sure to check the interest rate, loan terms, your name, address of the property, and social security numbers for accuracy prior to signing.

After all documents are signed, certain documents will be provided to the lender for review. If everything is in order, the lender will authorize the funding of the loan. Purchase loans are usually funded on the same day as closing. Refinance loans have a 3 day right of rescission period after closing, and fund on the 4th day after closing.

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