Stages of a Loan
Your licensed mortgage originator can get you a prequalification letter that says how much house you are qualified to buy. You will need to put together some paperwork including two years of tax returns and W-2 forms verifying your employment and income. This step will make the home buying process easier as most real estate professionals will not show homes until they get a copy of the letter.
A pre-approval goes further than a pre-qualification and can be an enormous advantage when you are looking for a home. It means that a mortgage lender has done a thorough examination of your finances, including your income, debts, and assets, and has determined you are qualified to borrow a certain loan amount at a certain rate. While it is not an actual guarantee that the lender will approve the loan, it still gives you substantial advantages when you are shopping for a home.
After you are pre-approved, you will have a better idea of what kind of price range you can afford.
Buyers who are pre-approved for a home loan have an enormous advantage over potential buyers who have not taken the appropriate initial steps. Real estate agents will take you more seriously knowing that you are likely to be able to make the home payments.
Your licensed mortgage originator will help you through the application process, much of which consists of gathering and reviewing documents. Those documents will include:
Recent pay stubs
Recent bank statements
Your lender will provide you with a loan estimate that includes fees and closing costs, including:
Mortgage application fee
Loan origination and document preparation fee
Your licensed mortgage originator will organize all the paperwork and send the information to the processor, who will in turn send all the information to you so you can review it and make sure it is accurate.
Your processor will begin processing your loan. They will gather everything up in a neat little package to hand off to the underwriter.
While all this is happening, your property will be appraised to safeguard you against spending more than the home is worth.
Underwriting will verify all the information you provided. The underwriter is responsible for analyzing and validating your income, assets, credit history, and home appraisal. The first thing they will do is compile and review your documentation to see your full financial picture. Next, they will reconstruct your loan scenario to ensure it meets all qualification guidelines and that it is the best loan to fit your financial needs. Finally, your underwriter will take steps to verify that your information is accurate and meets the ever-changing mortgage guidelines. You may be asked to provide additional documentation, depending on the requirements of your loan.
Once your loan has been approved, we will schedule your closing. This is a straightforward process and can be done from the convenience of your home. For refinance, it can be done at your home and will only take a short while for you to sign some paperwork.