We know that buying a home can be challenging and overwhelming for some. Our goal is to make this process a wonderful experience whether you are refinancing, buying a new home, or building your dream home.
In today’s mortgage lending world, there are numerous regulations in place designed to protect borrowers and lenders.
Below is a guide of what you may need to provide to the lender, what to expect throughout the loan process and tips to make the process go smoothly.
Documents typically needed from borrowers:
- Most recent 2 years of Personal and Business Federal tax returns with all pages, schedules, and statements.
- Most recent 1 full month of consecutive paystubs including YTD information.
- Most recent 2 months of actual bank statements for all deposit accounts (checking, savings, CDs, investments, retirement accounts, 401K accounts, etc.) with all pages included.
- Most recent 2 years of W2 forms and 1099 forms from your employer(s), Social Security, VA, Retirement, etc. (if applicable).
- If applicable, copies of child support order, divorce decree, property settlement agreement, pending sales agreements, etc.
- If applicable, most recent loan statement for any open 401K loans.
- Current Driver’s License or picture ID.
Each customer’s situation is different, so the lender may supply you with a more specific list of documents needed.
Phases of the Loan Process:
Application Phase:
- Final documentation is collected.
- All 3 credit bureaus are pulled, and the middle score is used for qualifying (if two or more borrowers apply, the lowest middle score will be used).
- A preliminary debt-to-Income analysis is completed to ensure ratios are within the lender’s guidelines.
- Various disclosures will be provided to you throughout the loan process including a Loan Estimate. You will need to review, sign, and return the disclosures and/or reply-back to our email messages promptly to meet regulatory requirements.
- Your application approval is subject to verification of all the information supplied such as employment, income, assets, liabilities, values, etc. It is also subject to the purchase agreement (if applicable), appraisal, title work, survey (if applicable), and final review by the loan underwriter.
- The interest rate will need to be locked-in during the loan process, normally at application. Discuss your options with your loan officer.
Loan Processing and Underwriting Phase
- An appraisal/property evaluation is normally needed and will be ordered by the bank. The appraisers are selected on a random basis in compliance with federal regulations. Borrowers must pay for the appraisal which is typically around $500 but may be higher or lower. Borrowers will receive a copy of the appraisal prior to loan closing.
- Title insurance is needed for nearly all mortgages and will be ordered by the bank. A title search is completed to ensure that the borrower/lender has or will have clear title to the property being financed. Any title issues uncovered must to be resolved.
- You may be asked to supply more documents throughout the process as your file is being processed and underwritten.
- Any unusually large deposits or payments made during or within 90 days prior to your application, may need to be documented by the lender to prove the source of funds.
- After the appraisal, title insurance, and all verifications have been received, your loan will undergo final review by a loan underwriter. Loan conditions will be issued at this point which may include added documentation requirements which must be provided before your loan receives Final Approval and is issued a Clear to Close.
Closing Phase
- A closing date and time are set according to availability of all parties involved.
- A Final Closing Disclosure will be issued which you must acknowledge receipt 3 days prior to the loan closing date.
- Closings typically take place at the title office. You will want to arrive 5-10 minutes early and have your Driver’s License or State ID ready. Plan on about 30-60 minutes for the closing process.
- You will receive a copy of all documents at closing.
