1- Choosing a lender

You have choices.  Don’t let anyone try to make you believe otherwise.  Banks, credit unions, savings and loans, retail mortgage lenders, and mortgage brokers are all in the business of selling mortgages.  Most people want a good rate, and low costs, and a reliable consultant to help them with the process.  It may be best to get at least 3 different quotes to help determine the best lender for your situation.  It is always in your best interest to avoid working with a lender who requires a deposit or application fee.

The best way to compare lenders is to get a Good Faith Estimate (GFE) from each company you are getting a quote from.  The GFE will disclose what costs and rates are associated with obtaining the loan.  Be sure to concentrate on only the lender and banking fees (in the top portion of the GFE) when comparing quotes.  The reason for this is that many competing lenders will misquote 3rd party fees (non banking related charges) and other closing costs and settlement charges, which can be confusing and misleading.  Be quite specific with your loan officer to ask what the total of bank and/or broker related charges would be.  A more specific question that can be asked is what are the total APR fees associated with this loan?  If your loan officer cannot answer this question, it would be wise to avoid doing business with them.   

2- Get Pre-Approved

When buying a house, you will need to get pre-approved. You can typically get pre-approved in a few minutes. A pre-approval for a traditional loan involves having a loan officer pull your credit and complete a loan application.  It is highly recommended that you get pre-approved before you start looking for a house. This will help you.  When dealing with certain lenders you may find out that your credit is good enough that the bank does not even require income or asset documentation as long as you have 10% down.  These no documentation loans are generally available to those who have credit scores above 680, and are usually very attractive to those who are self-employed, or have various income sources.  The benefits of pre-approval:

•   Find out the maximum house you can buy, so you don't waste time looking for properties you can not afford.
  

• Puts you in a stronger position when you are negotiating with the seller, because the seller knows that your loan is already approved.
  

• Helps you close quickly, since your loan is already approved.
  

3- Organize your documents

If your loan requires full documentation you will need to provide the following information for the bank to underwrite the loan:

• If you are salaried: provide two years W-2 and one month of pay stubs OR if you are self-employed: provide two years tax returns and a YTD profit and loss statement.
  

• If you own rental property, please provide rental agreements and two years tax returns.
  

• If you wish to speed up the approval process, please also provide two months bank statements for each bank, stock and mutual fund account.
  

• Provide recent copies of any stock brokerage or IRA/401K accounts.                     
  

4-Obtain Loan Commitment

Once your loan application has been received we will start the loan approval process immediately. This involves verifying the information in the loan application, including:

• Employment history
  

• Assets including your bank accounts, stocks, mutual fund and retirement accounts
  

• Property value
  

Based on your specific situation, additional documents or verifications may be required. To improve your chances of getting a loan approval:

• Respond promptly to any requests for additional documents. This is especially critical if your rate is locked or if you plan to close by a certain date.
  

• Do not make any major purchases. Do not buy a car, furniture or another house till your loan is closed. Anything that causes your debts to increase might have an adverse affect on your current application.
  

• Do not move money into your bank accounts unless it can be traced. If you are receiving money from friends, family or other relatives, please contact us.
  

• At this point you will need to purchase a home owners insurance policy effective the day you are signing your loan. 
  

5- Close the Loan

After your loan is approved, you will be required to sign the final loan documents. This will normally take place at the title company title company with a notary. Be prepared to:

• Bring a cashiers check for your down payment and closing costs if required. Personal checks are normally not accepted.
  

• Review the final loan documents. Make sure that the interest rate and loan terms are what you were promised. Also, verify that the name and address on the loan documents are accurate.
  

• Sign the loan documents.
  

• As soon as the title of the property has been transferred from the seller to the buyer at the county courthouse, you then have legal ownership of the property.
  

The Mortgage Process

  440-666-6069     toddlipps1@yahoo.com

             Available for appointments 7 days a week.