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Full Loan Approval is like shopping for a new home, condo or town home with cash! Let’s walk through each of the steps in the lending process.

THE USUAL BASIC ITEMS NEEDED TO MAKE LOAN APPLICATION FOR ALL PARTIES THAT WILL QUALIFY FOR THE LOAN

1. W-2 ‘s from last year
2. Paycheck stubs covering the past 30 days showing your current and “year to date” income
3. Two most recent statements for any checking or other accounts with down payment funds and closing costs
4. Most recent statement from other investments such as retirement ac counts, stocks, bonds
5. Any additional source of income such as child support, maintenance etc
6. Depending on your individual circumstance, some additional documentation may be required to issue your approval. Upfront approval is subject to a satisfactory appraisal and no change in financial status during the lending process. Do not finance a new car during the qualifying process!

THE PROCESS OF GETTING A MORTGAGE ….Your real estate agent will work with your throughout your mortgage lending process.

(1) PRE- QUALIFICATION

Pre-qualification occurs before the loan process actually begins. The lender gathers information about your income, debts (he may want to run a credit report), your desired down payment and makes a financial determination about how much house he feels you may be able to afford. He will help you determine your monthly payment comfort level. It is the lenders best guess on your ability to qualify before actually working up your loan package.

(2) APPLICATION

The application is actually the beginning of the loan process. I recommend that you begin with the application before you start your home search. If you should find a home before you have made your loan application, then application should quickly follow. You will need to complete a mortgage application with the loan officer and supply all of the required documentation for processing. Various fees and down payment options are discussed at this time and you should receive a Good Faith Estimate (GFE) and a Truth-In-Lending Disclosure (TIL) within 3 days that itemize the rates and associated cost for obtaining the loan.

(3) PROCESSING OF YOUR ESTIMATED LOAN

The lender will typically submit the loan to an automated underwriting system that will provide the lender with the necessary documentation needed to achieve loan approval that is personalized to meet the borrowers loan criteria.

The “processor” reviews the credit reports and documentation to verify your employment, debts and payment history. If there are unacceptable late payments, collections for judgments, etc. the processor will request an explanation from you. The processor also reviews the appraisal and survey and checks for property issues that may affect final loan approval. The processor’s job is to put together an entire package for the underwriter.

(4) THE UNDERWRITING OF YOUR LOAN

The underwriter is responsible for determining whether the package prepared by the processor meets all the lender’s criteria. If more information is needed or the underwriter has “conditions” that must be met, the loan is put into “suspense” and the borrower is contacted to supply more documentation or the conditions attached by the underwriter have been met.

If the underwriter approves the loan, the lender issues a commitment to lend, clears all contingencies to its commitment to lend and then is ready to schedules a closing place and time.

(5) CLOSING

The closing will occur, usually at the title company, after a full loan approval has been received (depending on several factors, including challenging credit or income issues or issues with the property that may arise during the underwriting and approval process). At the closing, the lender “funds” the loan with a cashier’s check, draft or wire to the closing agent (usually the title company) who disburses funds in exchange for the title to the property. This is the point at which you finish the loan process and buy the property, subject to the lenders loan.

Congratulations! You have just become a homeowner!