Step 1: Organize
Your Documents
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If you are buying or refinancing a home
- If
you are salaried:
provide two years W-2 and one month of pay stubs.
- If
you are self-employed :
provide two years tax returns and YTD profit and loss statement.
- If
you own rental property, provide rental agreements and two years tax
returns.
- 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.
- If
you are applying for a cash-out refinance please provide a letter
explaining what you plan to do with the proceeds.
- If you choose to include income from
child support and/or alimony, bring copies of court records of cancelled
checks showing receipt of payment.
- Provide
a copy of divorce decree if applicable.
- If
you are NOT a US citizen, provide us with a copy of your green card
(front & back).
- If
you are NOT a permanent resident provide us with your H-1 or L-1 visa.
- Certificate of Eligibility DD 214 (VA
loans only)
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If you are applying for a home equity loan or line of credit
- If
you are salaried :
provide two years W-2 and one month of pay stubs.
- If
you are self-employed:
provide two years tax returns and YTD profit and loss statement.
- If
you own rental property, provide rental agreements and two years tax
returns.
- Provide a copy of the note on your first mortgage. This will normally be
found in your closing loan documents.
- Provide a signed letter explaining what you plan to do with the
proceeds.
- Provide
a copy of divorce decree if applicable.
- If
you are NOT a US citizen, provide us with a copy of your green card
(front & back).
- If
you are NOT a permanent resident provide us with your H-1 or L-1 visa.
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Step 2: Get
Pre-Qualified or Pre-Approved
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Getting
pre-qualified before you apply for a loan can help you understand how much
you can borrow.
If you are 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 that 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:
- Find
out the maximum house you can buy, so you don't waste time looking for
properties you cannot afford.
- Puts
you in a stronger position when you are negotiating with the seller,
because the seller knows that your loan is already approved.
- Helps
you close quickly, since your loan is already approved.
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Step 3: Shop Loan Programs and Rates
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To shop for a loan
you will need to:
-
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 rate 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 rate loans.
- 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. For example, 1 point on a $100,000 loan is
$1,000. The more points you pay, the lower the rate you will get. However, most lenders put a cap on
the amount you can "buy down" the rate.
-
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
mortgage broker can help you make a decision that's best for you.
- Fill out the PickYourOwnRate.com form. Once you
have an idea of the interest rate and loan program that best suits your
needs make sure you fill out the PickYourOwnRate.com form so you have the
piece of mind that you are truly getting the rate that you deserve.
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Step 4: Apply for a Loan
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Once you fill out the PickYourOwnRate.com
form your information - along with the rate you have selected - will
immediately be sent to an experienced mortgage professional in your area in
order to start the loan approval process immediately.
The approval process involves verifying:
- Your
credit history
- Your
employment history
- Your
assets including your bank accounts, stocks, mutual fund and retirement
accounts
- Your
property value
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Based on your
specific situation, additional documents or verifications may be required.
To improve your
chances of getting a loan approval:
- Fill
out the loan application completely.
- 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.
- 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.
- 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 let
your mortgage professional know.
- 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.
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Step 5: Obtain Loan Approval
Once all the
required documents have submitted and the application process has been
completed your mortgage professional will:
- Submit the entire loan package to the
lender.
- Order the title work from the title
agent.
- Ensure the insurance policy is for the
appropriate coverage amounts and that the policy takes effect on or
before the date of the closing.
- Follow up to the underwriter at the lending
institution to ensure there are no additional documents needed.
- Clear any necessary approval
conditions with the underwriter.
- Schedule the closing with the title
agent and the lender.
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Step 6: Close the Loan
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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 at either the title agent’s office or at your
residence.
Be prepared to:
- Bring
a cashier’s check for your down payment and closing costs if required.
Personal checks are normally not accepted.
- 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.
- Sign
the loan documents.
- Your
loan will normally fund shortly after you have signed the loan
documents. On refinance and home equity loan transactions involving your primary residence federal
law requires that you have 3 days to review the documents before your
loan transaction can fund.
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