General Information

I'll Shop For The Best Loan For You!

The Mortgage Shoppe

Loan Process

Text Box: Pre-Qualification Pre-Qualification starts the loan process. Once I have gathered information about your income and debts, a determination can be made as to how much you can pay for a house, that is comfortable and reasonable for your income and debts. There are many different options as to what type of program will be the best for you, and I will be able to shop for the perfect loan. In attempting to approve homebuyers for the type and amount of mortgage you want, there are two key factors. First, your ability to repay the loan, and second, your willingness to repay the loan. Ability to repay the mortgage is verified by your current employment and total income. Generally speaking, it is preferred that you have been employed at the same place for at least two years, or at least within the same line of work. Your willingness to repay is determined by examining how the property will be used. For example, will it be your primary home or investment? Willingness is closely related to how you have fulfilled previous financial commitments, this emphasizing on the Credit Report and/or your rental history. Just remember that there are no rules carved in stone. Each person has a different situation, there are many ways to structure a loan; stated, verified, no docs...That is my job to find the best one for you! Mortgage Programs and Rates To be able to properly analyze a mortgage program, you need to think about how long you plan on keeping the loan. If you plan to sell the house in a few year, an adjustable or balloon loan my make more sense. If you plan on staying in the home for a long period, a fixed loan may be more suitable. The Application The application is the true start of the loan process and occurs within days one to five of the start of the loan process. With my aid I will be able to help you complete the application and provide all Required Documents. The various fees and closing cost estimates will have been discussed while examining the many mortgage programs and these costs will be verified by the Good Faith Estimate(GFE) and a Truth-In-Lending Statement(TIL) which you will receive within three business days of the submission of the application. I can take an application over the phone or in person, whichever is more comfortable to you. At this time, I will pull your credit report, so that I can find the best program to suits you. Processing Once the application has been submitted, the processing of the mortgage begins. The Processor orders Verification of Employment(if that is required for the loan), Verification of Deposit, Appraisal and Title Report. The information on the application, such as payment history, are verified as well. Any credit derogatories, such as late payment, collections and/or judgements require a written explanation. The process examines the Appraisal and Title Report checking for property issues that may require further investigation. The entire mortgage package is then put together for submission to the lender. Required Documents If you are purchasing or refinancing your home and you are salaried, you will need to provide the past two-years W-2s and one month of pay stubs. OR If you are self-employed you will need to provide the past two-years tax returns. If you are going Stated Income, you will not need to provide this. If you own rental property you will need to provide the Rental Agreements and the past two-years’ tax returns. If you wish to speed up the approval process, you should also provide the past three months’ bank statements, stock and mutual fund account statements. Provide the most recent copies of any stock brokerage or IRA/401k accounts that you might have. I will provide you with information concerning what is needed to fund the loan, example divorce decree, green card, ect. Credit Reports I will need to run a credit report, and these are good for anywhere from 30-60 days depending on the type of loan we will be providing you with. I will go over your credit with you, so that we make sure it is accurate. If you have had credit problems, be prepared to discuss them honestly with me, and we can prepare a “Letter of Explanation.” When applying for a loan, your credit comes from three credit agencies and we always use your mid-score which is FICO. The three agencies are: Equifax (Beacon), Experian (formerly TRW), and Empirica (Transunion). Your score looks at the following items: past delinquencies, derogatory payment behavior, current debt levels, length of credit history, types of credit and number of inquires. A borrower with a score of 680 and above is considered A+ borrower. A loan score will be put through an “automated basic computerized underwriting” system and be completed quickly. Borrowers in this category qualify for the lowest interest rate and their loan can close quickly. A borrower with a score below 680, but above 620 may indicate a higher potential risk. Supplemental documentation may be required before final approval. Borrowers with this credit score may still obtain “A” pricing. Borrowers with a credit score below 620 are not normally locked into the best rate and terms offered. This loan type usually goes “sub-prime” lenders. I will work my hardest to try and find you the best term and rate possible. Appraisal Basics An appraisal of real estate is the valuation of the rights of ownership. The appraiser must define the rights to be appraised. The appraiser does not create value, the appraiser interprets the market to arrive at a value estimate. As the appraiser complies data pertinent to a report, consideration is given to the condition of the property, upgrades, and amenities. Considerable research and collection of data must be completed prior to the appraiser arriving at a final opinion of value. For the typical house, an appraisal fee is $350.00, which is paid prior to the appraisal being complete. For semi-custom, custom homes, 2-4-plexes, and atypical homes, appraisal fees vary. Underwriting Once the processor has put together a complete package with all verifications and documentation, the file is sent to the lender. The underwriter is responsible for determining whether the package is deemed an acceptable loan. If more information is needed, the loan is put into “suspense” and the borrower is contacted to supply more information and/or documentation. If the loan is acceptable as submitted, the loan is put into an “approved” status. Closing Once the loan is approved, the file is transferred to the closing and funding department. The funding department notifies the broker and closing attorney or title agent, of the approval and verifies broker and closing fees. They then schedule a time for the borrower to sign the loan documentation. At the closing the borrower should: Bring a cashiers check for the down payment and closing costs if required. Personal checks are normally not acceptable and if they are, it will delay the closing until the check clears the bank. Review the final loan documents. Make sure that the interest rate and loan terms are what you agreed upon. Also, verify that the names and address on the loan documents are accurate. Sign the loan documents. Bring identification and proof of insurance. After the documents are signed, the title agent/attorney returns the documents to the lender who examines them and, if everything is in order, arranges for the funding of the loan. Once the loan has funded, the closing title agent/attorney arranges for the mortgage note and deed of trust to be recorded at the county recorders office. Once the mortgage has been recorded, the closing title agent/attorney then prints the final settlement costs on the HUD-1 Settlement Form. Final disbursements are then made. Summation The typical closing for a purchase is 30 days, and on refinancing it can be anywhere from 14-30 days to close. Please contact Kerri Leonard at 702-808-2397, and “I’ll shop for the best loan for you.”

The Mortgage Shoppe

Kerri Leonard

702-808-2397

1. Pre-Qualification

2. Mortgage Programs and Rates

3. The Application

4. Processing

5. Required Documents

6. Credit Reports

7. Appraisal Basics

8. Underwriting

9. Closing

10. Summation