Click on the links to go directly to the section of interest:

Getting Started: Application & Disclosures

Income Documentation

Asset Documentation

Other Documentation

Appraisal

Rate Lock Periods

Understanding Closing Costs

Signing Your Final Loan Documents

Getting a home mortgage is not as difficult as it may appear. Many of the frustrations that borrowers experience can be alleviated by understanding what information their representative needs to structure the best offer for their financing needs!

Getting Started: Application & Disclosures

The first steps in the financing process are to complete an application with your representative and review both your short term (this transaction) and long term (5-10 year) financial goals. As your mortgage consultant, it is your mortgage consultant's responsibilty to present the appropriate financing option(s) by qualifying you based on your credit worthiness. 

Your credit worth is determined by analyzing your credit score, income, assets, debts and residential history.  It is extremely important, when you apply for a home mortgage, to answer all questions as accurately as possible alerting to an inconsistencies or potential issues. With thousands of different programs to select from, your loan officer has the ability to find the right rate and documentation level for you!

Within 3 (three) business days of your application we will send you an application and Good Faith Estimate which provides details of your estimated closing costs as well as general state and federal disclosures. In addition to the Good Faith Estimate, you will also get a statement, known as the Truth In Lending that shows your estimated monthly payment, the cost of your finance charges, and other facts about your mortgage.  You will need to sign these documents and return them to your mortgage with some additional documentation relating to verifying the information provided on your application.

Preparing your documentation prior to meeting with your mortgage consultant is a great way to simplify the loan process. Having all proof of income and assets available is great time saver (and stress reliever) for all parties involved!

Income Documentation

There are many forms of income documentation that can be acceptable to use for obtaining a mortgage, however, it depends on which lender and what type of mortgage program you are trying to obtain mortgage financing on. The standards range from full documentation to no documentation and will vary between lenders.

Below is a list of documentation based on the general types of income earned.

Wage, Salary, Tips:

• Name and address of employers) covering a complete 2 year time period.
• 2 (or more) Pay Stubs documenting the most recent month.
• W-2 forms for the past two years.
• A written explanation of any employment gaps or changes in line of work.

Self-Employed, Rental Income:

• Complete personal and business - all Schedules - signed Federal Income Tax Returns for the past 2 (two) years.
• Year-to-date Profit and Loss Statement and Balance Sheet.
• Lease Agreements for all rental properties.

Social Security, Disability, Retirement or Pension:

• Awards Letter or Benefits Statement proving continuation for the next 3 (three) years.
• Most recent bank statement of the account that award or benefit is deposited in.

Asset Documentation

Personal assets are another factor in determining your credit worthiness. Depending on your loan type, you may be asked to provide documentation to verify the sources of the assets you state. Below is a list of common asset types and the type of documents used to validate this information:

• Checking/Savings Account - 2 months current bank statements (all pages).
• Stock, 401k, Mutual Funds or Other Retirement Accounts - Most recent statement showing a 2-3 month history.
• Proceeds from the Sale of Another Property - Settlement Statement (HUD1) documenting the transaction.

If you are experiencing difficulty meeting any of the income and/or asset documentation requirements, please discuss this with your representative as they can offer you alternative programs.

Other Documentation

There may be other documentation that we will be required to close your loan. Some common additional documents are below - please discuss with your mortgage consultant to determine if these requirements apply to you and your loan scenario.

Residential Documentation:

• Residential history covering a complete 2 year time period. Depending on whether you owned or rented your previous residence(s) you may be required to provide the following: 
• (Rent) Landlord name and telephone number.
• (Rent) Cancelled checks documenting rent payment (check with mortgage consultant on how far back you will need to verify).
• (Own) Current mortgage coupon/statement if property still retained.
• (Own) Settlement Statement or HUD1 if property sold or recently refinanced.

Transaction Specific Documentation:

• Purchase:
• Copy of purchase contract.
• Cancelled check verifying receipt of earnest money by escrow.
• Gift letter (if gift of equity applicabe).

• Refinance:
• Mortgage Coupon/Statement from current lender or name and loan number.
• Recent statements for any non-mortgage debt that will be paid off in the closing of the loan.

Personal & Credit Documentation:

• Copy of photo IDs and social security cards for all applicants. - or - Copy of Permanent Resident Alien Card.

• If applicable:
• Bankruptcy Papers
• Divorce Decree

Appraisals

Depending on the LTV, or Loan To Value, and size of your loan, the lender has requirements regarding the evaluation of your home. It may be necessary to obtain an appraisal of your property in order to close your loan. 

If an appraisal is needed, your loan officer will coordinate the appointment with the appraiser.  If you are purchasing a home it may be possible to have the seller pay for the appraisal cost.  If you are refinancing you should be prepared to pay for this expense yourself.  Appraisal costs are typically between $250-450. 

Rate Locks

When you feel comfortable with the loan that you have discussed with your mortgage consultant it is time to think about locking your loan. A rate lock is a lender's promise to hold a certain interest rate for you for a specified period of time while your loan application is processed.  The advantage to locking in a rate is that you do not have to worry about rate increases while your application is being processed.  The disadvantage is that a rate lock will prevent you from getting a better rate if they decrease.

Rate lock periods vary from lender to lender. Standard rate lock periods are 10, 15, 30 and 45 days. In some circumstances, such as in the case of a new construction loan it is possible to lock months in advance (but typically costs money to do so and is not often taken advantage of).

Understanding Closing Costs

Not only do you need to understand what type of mortgage you should select, but you must also understand and analyze the closing costs associated with financing. Closing costs are charges, fees and pre-paid items for originating and processing your loan. Closing costs can even include an optional expense you pay to reduce the interest rate, known as a discount fee or discount points.

While specific costs will differ from state to state and from lender to lender, there are a number of fairly standard costs you can expect. A quick list of closing costs are referenced below.

Example(s) of Broker Fees:

• Origination Fee
• Processing Fee
• Application Fee
• Administrative Fee

Example(s) of Lender Fees:

• Underwriting Fee
• Discount Fee (Discount Points)
• Funding Fee
• Lender Fee
• Document Preparation/Review Fee
• Tax Service Fee

Example(s) of Title & Escrow Fees:

• Attorney's Fee
• Title Insurance
• Transfer Tax
• Recording Tax
• Notary Fee
• Escrow Fee Insurance
• Reconveyance Fee

Example(s) of Other 3rd Party Fees:

• Appraisal Fee
• Credit Report Fee
• Termite Inspection Fee
• Homeowners Insurance Premium
• Property Survey

Keep in mind that brokers/lenders are required to give you a Good Faith Estimate with your closing costs broken out into sections within three days of application. Additionally, at closing, you will receieve a Settlement Statement (also known as a HUD-1) that discloses the final closing costs that you are required to sign in acknowledgement.

Signing of Your Final Loan Documents

Once your loan has been processed it will be time for you to sign your final loan documents.  Your mortgage consultant will contact you to schedule your signing. After your signing it will take a few days to record your new lien and disburse the funds!