Loan Process

Step 1

Find Out How Much You Can Borrow

The first step in obtaining a loan is to determine how much money you can borrow. Before committing to buying a home, you should determine how much home you can afford well before you begin looking.

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Loan Detail

Original Loan Amount $224,000.00	Down Payment 10 %	Interest 5.5 %	Term 15 Years
Total you will repay $201,600.00	Down Payment $22,400.00	Monthly Payment (P & I) $1,647.24	Total Interest 180

Since Principal and Interest are not the only factors of a loan we should include an estimate for other costs involved with a loan.

Your down payment was less than 20% of the loan, which means you will be paying PMI. This averages around $55.00 for every $100,000.00 borrowed. An estimate for PMI will be around $110.88 per month.
An average tax figure for your purchase might be about $10.00 for every $1,000.00 assessed value per year. If the assessed value of your home is 85%, this would make your homes assessed value $190,400.00 and your monthly tax around $158.67
Homeowners Insurance is another factor of a loan. An average estimate of your monthly insurance could be about $56.00

Amortization Schedule (P & I)

#	Per/Month	Principle	Interest	Balance

Details

You may also elect to get pre-qualified for a loan which requires verification of your income, credit, assets and liabilities. It is recommended that you get pre-qualified so you can:

1. Filter out homes above your price range when you do begin your search.

2. Be in a better position when negotiating with the seller (seller knows your loan is already approved).

3. Close your loan quicker—the mortgage broker who pre-qualified you already has your information and a good idea of your borrowing qualifications.

Get Pre-Qualified

Step 2

Select The Right Loan Program

Home loans come in many shapes and sizes. Deciding which loan makes the most sense for your financial situation and goals means understanding the benefits of each. Whether you are buying a home or refinancing, there are 2 basic types of home loans. Each has different reasons you'd choose them.

1. Fixed Rate Mortgage

Fixed rate mortgages usually have terms lasting 15 or 30 years. Throughout those years, the interest rate and monthly payments remain the same. You would select this type of loan when you:

• Plan to live in home more than 7 years

• Like the stability of a fixed principal/interest payment

• Don't want to run the risk of future monthly payment increases

• Think your income and spending will stay the same

2. Adjustable Rate Mortgage

Adjustable Rate Mortgages (often called ARMs) typically last for 15 or 30 years, just like fixed rate mortgages. But during those years, the interest rate on the loan may go up or down. Monthly payments increase or decrease. You would select this type of loan when you:

• Plan to stay in your home less than 5 years

• Don't mind having your monthly payment periodically change (up or down)

• Comfortable with the risk of possible payment increases in future

• Think your income will probably increase in the future

By carefully considering the above factors and seeking our professional advice, you should be able to select the one loan that matches your present condition as well as your future financial goals.

Step 3

Apply For A Loan

Next, is to complete the loan application process. To ensure you have the documentation ready for this step, review our Application Checklist. Then, follow the link below to complete an online home loan application or contact our office to discuss your loan options with one of our loan originators before applying.

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Step 4

Begin Loan Processing

Although lenders conform to standards set by government agencies, loan approval guidelines vary depending on the terms of each loan. In general, approval is based on two factors: your ability to repay the loan and the value of the property.
Once your loan application has been received, we will start the loan approval process immediately. Your loan processor will verify the information you have given. If any discrepancies are found, either the processor or your loan officer will contact you to resolve the issue. Information collected for the mortgage loan application includes:

Income/Employment Check
Is your income sufficient to cover monthly payments? Industry guidelines are used to evaluate your income and your debts.

Credit Check
What is your ability to repay debts when due? Your credit report is reviewed to determine the type and terms of previous loans. Any lapses or delays in payment are considered and must be explained.

Asset Evaluation
Do you have the funds necessary to make the down payment and pay closing costs?

Property Appraisal
Is there sufficient value in the property? The property is appraised to determine market value. Location and zoning play a part in the evaluation.

Other Documentation
In some cases, additional documentation might be required before making a final determination regarding your loan approval.

In order to improve your chances of getting a loan approval:

1. Fill out your loan application completely.

2. Respond promptly to any requests for additional documentation, especially if your rate is locked or if your loan is set to close by a certain date.

3. Do not move money into or from your bank accounts without a paper trail. If you are receiving money from friends, family, or other relatives, please prepare a gift letter and contact us.

4. Do not make any major purchases until your loan is closed. Purchases cause your debts to increase and might have an adverse effect on your current application.

5. Do not go out of town around your loan's closing date. If you plan to be out of town, you may want to sign a Power of Attorney.

Step 5

Close Your Loan

After your loan is approved, you are ready to sign the final loan documents. You must review the documents prior to signing and make sure the interest rate and loan terms are what you were promised. Also, verify the name and address on the loan documents are accurate. The signing normally takes place in front of a notary public.

There are also several fees associated with obtaining a mortgage and transferring property ownership which you will be expected to pay at closing. Bring a cashier’s check for the down payment and closing costs if required. Personal checks are normally not accepted. You will also need to show your homeowner's insurance policy, and any other requirements such as flood insurance and proof of premium payment.

Your loan will normally close shortly after you have signed the loan documents. On owner occupied refinance loan transactions federal law requires that you have 3 days to review the documents before your loan transaction can close.

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