Loan Process / FAQ
The overall Loan Process is a straight-forward series of steps for you the prospective home buyer.
Buyers today are, at a minimum, Pre-Qualified to be better positioned to negotiate the best possible terms on their home purchase.
(In a 'sellers' market, Pre-Approval may be required by the seller to accompany your initial offer.)
Prequalify now with the on-line pre-qualification form located at the top naviagation bar and then contact your site host, a real estate and loan professional, to discuss your personal financial situation. Being Pre-Qualified is a smart place to start because it lets prospective sellers know you have already taken the initial step to possibly buy their home.
You'll be asked many questions to determine the best type of mortgage financing for you and your specific needs. Then based on your personal financial position, you'll know the amount of mortgage you qualify for. Also taken into consideration are the term of the loan, the interest rates available, and your unique personal situation. You will receive a "certificate" or "letter" stating the amount of loan you are qualified for, with its terms. Your host is readily available at any time to answer your questions during the process. Begin to assemble the supporting documentation that will be needed later with your full loan application ....get all the items together in one folder or pouch.
At the Pre-Qualification step, you'll have a good idea what kind of terms and which loan program you can expect to benefit most from.....based on standard lender guidelines.
Pre-Approval for your mortgage is the next milestone along your path to full Loan Approval and your secure online tool to accomplish this is also located at the top naviation bar. Additional information will be collected about your employment, your assets, your residence history, and so on as found on this form. Be honest and complete when you complete the form....inaccuracy only makes your loan process more difficult, and take longer.
Being prepared to explain any derogatory items in your credit report is of course necessary for success. Disclose everything at this point to avoid disappointment later. Your host then identifies potential lenders and receives a prelimary approval based on the information you provided.
You will be issued a Pre-Approval letter to accompany your initial purchase offer to the seller or may be asked to produce this document on fairly short notice. A Pre-Approved Buyer has a stronger offer than a Pre-Qualified Buyer!!
After Buyer and Seller agree to their unique contract, this document is then packaged with the completed loan application plus supporting documentation required by the lender, and sent for full approval. Within 3 days after your loan application you will receive a Good Faith Estimate. This document is required by the Federal Government and will provide you with an estimate of your closing costs. These costs include origination fees, discount points, mortgage insurance, title insurance, escrow reserves, hazard insurance and other fees associated with your loan.
You will also be provided during this time a Truth-in-Lending Disclosure statement. This document details the estimated monthly payment for your loan as well as other things such as interest rate and the Annual Percentage Rate (APR). The APR represents the amount of finance charges that you will pay over the life of the loan. APR also includes fees such as the origination fee and other fees.
Once your loan has been approved, you, the Sellers' Realtor and your Buyers' Realtor will be contacted and will then be advised the exact date your transaction will close, generally according to the contract.
Throughout the process you will receive updates on your loan, telling you what is still needed to get your loan approved. Being well informed reduces your stress and allows you to look after the many details associted with your move.
Federal law (RESPA) states that you are not required or under any obligation to use your host for both real estate and mortgage services.....you may select only the service(s) you wish. Some feel that using one individual for the primary services of real estate and mortgage loan services simplifies the process and provides one individual to hold accountable. Others may, for example, have an existing lender or broker they may wish to continue thier mortgage business with. That choice is solely yours to make.
Which is best for you...Pre-Qualify or Pre-Approval ?
Should you have further questions, use Contact Host to obtain your answers.