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An Overview of the
Loan Process
Organize your
documents
If you are buying or refinancing a home
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If you are
salaried: provide two years W-2 and one month of paystubs OR
if you are self-employed: provide two years tax returns and
a YTD profit and loss statement.
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If you own
rental property, please provide rental agreements and two
years tax returns.
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If you wish to
speed up the approval process, please also provide three
months bank statements for each bank, stock and mutual fund
account.
Provide recent copies of any stock brokerage or IRA/401K
accounts that you may have.
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If you are
requesting a cash out refinance please provide a letter
explaining what you plan to do with the proceeds.
Provide a copy of divorce decree if applicable.
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If you are NOT
a US citizen, provide us with a copy of your green card
(front & back) or, if you are NOT a permanent resident
provide us with your H-1 or L-1 Visa.
If
you are applying for a home equity loan
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If you are
salaried: provide two years W-2 and one month of paystubs OR
if you are self-employed: provide two years tax returns and
a YTD profit and loss statement.
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If you own
rental property, please provide rental agreements and two
years tax returns.
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Please provide
a copy of the note on your first mortgage. This will
normally be found in your closing loan documents.
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Please provide
a signed letter explaining what you plan to do with the
proceeds.
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Provide a copy
of divorce decree if applicable.
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If you are NOT
a US citizen, provide us with a copy of your green card
(front & back) or, if you are NOT a permanent resident
provide us with your H-1 or L-1 Visa.
Get
Qualified
Getting qualified before you apply for a loan can help you
understand how much you can borrow.
When buying a house, you may get pre-qualified or pre-approved.
You can typically get pre-qualified over the phone or on the
Internet in a few minutes. A pre-qualification is not as
beneficial as a pre-approval where you have to go through a more
rigorous process which includes verification of your credit,
income, assets and liabilities. It is highly recommended that
you get pre-approved before you start looking for a house. This
will help you:
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Find out the
maximum house you can buy, so you don't waste time looking
for properties you cannot afford.
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Puts you in a
stronger position when you are negotiating with the seller
because the seller knows that your loan is already approved.
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Helps you
close quickly, since your loan is already approved.
Shop loan programs and rates
To shop for a loan you will need to:
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Think about
how long you plan to keep the loan. If you plan to sell the
house in a few years you may want to consider an adjustable
or balloon loan. On the other hand, if you plan to keep the
house for a longer time, you may want to look at fixed
loans.
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Understand the
relationship between rates and points. Points are considered
to be prepaid interest and are tax deductible. Each point is
equal to one percent of the loan. So for example 1 point on
a $150,000 loan is $1,500. The more points you pay, the
lower the rate you will get.
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Compare
different programs. Shopping for a loan can be difficult.
With so many programs to choose from, each of which has
different rates, points and fees, it's hard to figure out
which program is best for you. That's where an experienced
loan officer can help you make a decision that's best for
you.
Obtain Loan Approval
Once your loan application has been received we will start the
loan approval process immediately.
This involves verifying your:
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Credit history
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Employment
history
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Assets
including your bank accounts, stocks, mutual fund and
retirement accounts.
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Property value
Based on your
specific situation, additional documents or verifications may be
required.
To
improve your chances of getting a loan approval:
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Fill out the
loan application completely.
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Respond
promptly to any requests for additional documents. This is
especially critical if your rate is locked or if you plan to
close by a certain date.
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Do not make
any major purchases. Do not buy a car, furniture or another
house until your loan is closed. Anything that causes your
debts to increase might have an adverse affect on your
current application.
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Do not move
money into your bank accounts unless it can be traced. If
you are receiving money from friends, family or other
relatives, please contact us.
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Do not go out
of town around the closing date. If you do plan to be out of
town when your loan is expected to close, you may sign a
power of attorney to authorize another individual to sign on
your behalf.
Close
the Loan
After your loan is approved, you will be required to sign the
final loan documents. This will normally take place in front of
a notary public. Be prepared to:
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Bring a
cashiers check for your down payment and closing costs if
required. Personal checks are normally not accepted.
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Review the
final loan documents. 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.
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Sign the loan
documents.
Your loan will
normally close shortly after you have signed the loan documents.
On refinance and home equity loan transactions federal law
requires that you have 3 days to review the documents before
your loan transaction can close.
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