Applying for your loan really starts the process. The first step is providing your personal and financial information on a Loan Application. You can provide this information to your Loan Office a variety of ways: in person, by fax or even apply on-line.
Your loan office will use this information to determine the type and amount of loan you qualify for. Your Loan Officer will help you select a loan program and rate that meets your needs
Things to know about choosing a loan program: Do you want a fixed rate or adjustable/ARM loan? ARM loans offer lower rates but the monthly payments will move with interest rates.
Are you eligible for a government loan program such as FHA or VA? If not, you will be doing a conventional loan.
Are you looking for a loan over $359,650.00? If so, you will need a jumbo loan program.
What is the amount you want to put down as downpayment? On conventional loans, if you put less than 20% of the value of the home down as down payment, you may need private mortgage insurance. Another way to think of this is if you have greater than an 80% loan-to-value, you will get to put less down but will most likely need private mortgage insurance.
How much am I comfortable paying each month on my mortgage? Ultimately, you need to decide what is the right amount for you. Contrary to popular belief, the lowest rate is not always the best for all buyers. The best rate is defined by your unique situation. Here are some things to think about: Discount Points or Points are fees paid up front that allow you to lower the interest rate. They are expressed as 1% of the loan balance. Thus, 1 point on $100,000 loan equals $1,000. Instead of paying higher interest every month, you almost pre-pay it in the form of points. Points often make sense for buyers who are going to stay in the house for a period of time. If you know you won't stay in the house very long, then you may want to take a higher rate and avoid points. Our Loan Officers can help you with this process.
Mortgage interest is tax-deductible. Thus, some borrowers don't mind a slightly higher rate because it shelters their income.
One of the first steps in this phase involves sending the necessary disclosures. You will receive disclosures within 3 business days after we receive your application. Disclosures you will receive include: Good Faith Estimate: an estimate of all the fees associated with getting your loan. Truth-in-Lending: a detailed description of the loan you have chosen. Home Loan Executives uses Freddie Mac's automated underwriting system, Loan Prospector, on all of its loans. Loan Prospector allows us to take your application data and generate loan approvals quickly. These approvals are called "conditional" because they will ask for documentation to support the information on your application. For example, one of the conditions could be for your last two months bank statements so we can verify your assets in the bank. Processing your loan is taking this documentation and checking to make sure they support the numbers originally completed on the application. Now we will underwrite your loan. An underwriter will review the automated underwriting feedback, your submitted documentation on income and assets, your credit reports along with an appraisal of the property. Common jargon used by underwriters include: LTV, ratios, reserves, and PITI. Our glossary can help you better understand all of these. During this process, a title search will be ordered to determine if there are any liens against the property that need to be repaid. (Both you and Home Loan Executives will be taking out title insurance to ensure good title to the property when the loan closes.) Once the above steps are successfully completed, you will receive a final loan decision. Loan Prospector is a registered trademark of Freddie Mac. Closing your loan is the final step in getting your mortgage. In the industry, it is often called settlement. Closing is a little different depending on the state and whether your loan is a refinance or a purchase. Certain states the closing agent is a title company. (Typically, this is the same company that did the title search and issued title insurance.) In other states it may be an attorney. Purchase Transactions: Your "cash to close" to Home Loan Executives will include your down payment and all other closing costs. Home Loan Executives will pay the sellers' mortgage lender the remaining balance, any fees and then disburse the remaining amount to the Seller. Typically, the Seller and Buyer close at different times. Refinance Transactions: Home Loan Executives will pay off the remaining balance of your existing loan including any. If the loan is a "cash-out" refinance, then you will get money back from the transaction. Closing is more than just money changing hands, it is where you will sign all your final loan documents, including the Mortgage Note and Deed of Trust. And that's it! You have now chartered your course to a successful mortgage!