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 An overview of the loan process
Make no mistake, there's a lot involved in getting a mortgage loan. We do is most of the heavy lifting for you, so you can concentrate on what's important -- preparing to move into your new home, saving money, or making plans for your home equity line of credit.
There are four main steps involved in getting a loan. You'll see that we've made your part in them as easy as possible, and we do all the work! That's what we're here for.
| Step one: determine how much you can borrow |
Lenders use a formula to calculate how much you qaulify for. This formula is based on your gross monthly income. There are two parts to this formula. The first is your housing ratio. This is calculated by multiplying your monthly income times 29%. That dollar amount is the max mortgage payment the lender would like to see. This figure includes escrows (taxes & insurance). The second part of the formula is the total expense ratio. This is calculated by multiplying your gross monthly income times 42%. This figure is the maximum amount inclusive of the mortgage payment plus all monthly expenses reporting to the credit bureaus. An example is $3000. gross monthly income X 42% = $1260. subtract any car loan and credit card bills, this dollar amount is the maximum you can qualify for. This is considered to be a manually underwriten loan. If credit is good and/or assets are high we can run the scenerio on an automated system (DU). This engine allows for ratios as high as 53%!
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| Step two: pre-qualify for your loan |
You supply information about your employment, your assets, your residence history, and so on. We get your permission to run your credit score. When we review all this information we give you a Pre-Qualification Letter. This lets your realtor or seller know that you have taken the first steps to obtain a mortgage and are a serious buyer. It gives you clout when several people are interested in the same home. Your offer becomes stronger because of this Pre-Qualification! While you're picking out the home that's right for you, we're busy finding the loan that's right for you.
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| Step three: File is sent to underwriting |
Once you've made an offer and it's been accepted, it's time to complete the loan application. We order an appraisal, survey and title work on the property. We then submit your complete file to the lender. Typically it takes 48 hours to receive a conditional loan approval. This may have a few odd items the lender may ask for before we receive a "clear to close". The loan is then locked and scheduled for closing.
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| Step four: your loan is funded |
We'll coordinate the closing. We will schedule a time and date that works for all parties involved. We make sure all the papers your lender will need are in order, and you'll sign everything at the escrow/title company's office.
| You've answered a few questions, given us some detailed information, applied online, and next thing you know, you're moving in! We're in the business of mortgage loans -- so we do most of the work. Doesn't that make sense?
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