Application Process

Let’s follow your mortgage application. Where does it go? Who sees it? And why?
NOTE - Typically, when your Loan Officer has;
Title, appraisal, Purchase Contract (when applicable) Approval, with conditions met, should have the file through underwriting and into the final doc department w/in 2-3 business days.

For the first time homebuyer, and even for many veteran homebuyers, or the seasoned homeowners, the mortgage application process can hold many mysteries and can often be stressful. Let’s shed some light on the process. The more you know about what to expect, the less stress you’ll experience.

Your mortgage application.
If you desire a face to face interview, one of our loan officers will meet with you to start the mortgage application process at a time and location that is convenient for you, or we can utilize a delivery service (Fed Ex, UPS etc.) for your convenience.

The mortgage application requests information about the borrower(s) on the loan, including you, your spouse (if applicable), and co-borrowers (if any). The information you provide will help us recommend the loan that best suits your needs and financial situation. It’s very important to be complete and accurate, so that differences between the application and the documents collected by us don’t cause delays as you get closer to funding.

We will be able to use the information you provide on your mortgage application to "pre-qualify" you. That means you’ll learn, based on your income and debts, just how large a loan you can qualify for: It shouldn’t be considered an approval, but can be helpful in determining how much house you can probably afford/amount of total loan you qualify for. In addition, we can arrange a "pre-approval" with a lender - which is an actual loan approval for a specific loan amount, contingent on a property appraisal only. With loan pre-approval, you already know you’ll be approved for your loan before you start shopping for your home. Check with us for more information about loan pre-approval.

What a lender needs to know.
Typically, or not typically, lenders need to consider five key factors in determining whether or not they are able to approve your loan:

1. INCOME. When utilizing a "Full Documentation" loan program, the lender will need to qualify your income for repayment purposes.

2. DEBT. When utilizing a "full Documentation" loan program, the lender needs to know that your other bills (not including utilities and taxes) will allow you to pay your mortgage. Some lenders are more lenient than others and some just have different credit qualifying criteria.

3. CREDIT HISTORY. The lender wants to see that you have a history of paying your bills on time. And if you haven’t been able to, the lender looks for a reasonable explanation. There are many different kinds of loans for all credit situations.

5. PROPERTY VALUE. The lender needs to be sure that the property you are buying/refinancing is valuable enough to support the sale price/ loan-to-value ratio.

After your loan application is complete, we can obtain a full approval with conditions, we will then begin the process of collecting the documents required to support the information on the application.

First, we will obtain a Credit Report, from the major credit reporting agencies.

Second, if by design, we will send a Verification of Employment (VOE) form to your employer(s) to verify your salary and employment history -IF NEED BE, DEPENDING ON THE LOAN PROGRAM.

Third, if by design, we will send a Verification of Deposit (VOD) form to your savings institution(s) to verify your savings - IF NEED BE, DEPENDING ON THE LOAN PROGRAM.

Fourth, a professional appraiser will visit the property to determine its value, taking into consideration location, zoning, and size, as well as the sale price of similar properties in the same neighborhood. This is known as a Property Assessment - IF NEED BE, DEPENDING ON THE LOAN PROGRAM.

A Gift Letter – If any of your down payment is to be in the form of a cash gift from a relative, you’ll need a letter from that relative explaining that the cash is a gift and no repayment is expected - IF NEED BE, DEPENDING ON THE LOAN PROGRAM. (There are usually limitations regarding the percentage of the down payment that can be a gift. We will be able to provide details.)

Other Sources of Income – If you receive income from sources such as rental property, social security or disability, alimony, and/or child support, we will need to document these - IF NEED BE, DEPENDING ON THE LOAN PROGRAM.

Self-Employment Information – If you’re self-employed, lenders need tax returns, financial statements, and a profit and loss statement - IF NEED BE, DEPENDING ON THE LOAN PROGRAM.

Investment Income – If you earn any income from investments or dividend income, you’ll need to provide these records - IF NEED BE, DEPENDING ON THE LOAN PROGRAM.

Within three business days of receiving the application, we will provide you with a "Good Faith Estimate" of the anticipated closing costs. These costs include origination fees, points, mortgage insurance, title insurance, escrow reserves, hazard insurance, miscellaneous lender fees, and our fee.

You’ll also receive a Truth-in-Lending Disclosure. This will show you the estimated monthly payment and the total cost of all finance charges.

What’s next?
We will send your completed loan application to the lender that offers the best loan at the best rate for your particular situation.

Then, the lender’s underwriter will review the package and all the documents to make a decision on your loan.

Sometimes the underwriter will have questions or need additional information from you in order to completely review your loan. We can usually help you resolve any issues that may arise.

After the underwriter approves the loan, you will receive a commitment letter which spells out the terms of the loan and the length of time for which those terms are offered.

Sometimes you’ll need to accept the commitment by returning a signed copy to the lender within five to ten days, your Loan Officer will let you know. Sometimes the underwriter approves the loan with conditions that you’ll need to meet in order to close the loan. These will be spelled out in the commitment letter.

Once the commitment letter is received, you are assured of the financing you need to complete the purchase of your home.

A note of comfort to the waiting applicant.
While the time between submitting your application and receiving the commitment letter can be nerve-wracking, keep these important facts in mind.

The lender wants to make the loan. Loan Officers are looking for ways to approve your loan – not reject it. Providing us with complete and accurate documentation right from the beginning helps speed the process along.

Also, make it easy for us to contact you. The faster you can answer any questions that may arise, the more promptly your loan can be processed.

Now that you understand that the loan process involves many detailed steps, you can see why it sometimes takes as long as several weeks to receive an approval.

When we work together in cooperation, the home loan process can be just one of the many steps that lead to your enjoyment of the American Dream – home ownership!