The Loan Process

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    STEP 1: Loan Application

    Before you begin house hunting, you need to know how much you can qualify for and establish a budget. Completing the loan application will collect important information such as your identity, employment and credit history, available assets, and liabilities.

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    STEP 2: Select a Loan Product

    After completing your application and a credit report inquiry, we will determine which loan program you qualify for and what fits your homeownership goals.

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    STEP 3: Prepare Documents

    It's time to gather your documentation and start the home search. The documents required will include your identification, employment and income history, bank statements, tax forms, and a purchase contract.

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    STEP 4: Submit to Underwriting

    During the open and closing of escrow, you will have inspections with your realtor/seller, as well as underwriting requests. Work with your loan representative closely to avoid closing delays. Always have open communication with your loan officer as a best practice.

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    STEP 5: Closing Day

    The best part of this process comes last - closing day. Once you have provided the required paperwork and the house passes inspections, you are CLEAR TO CLOSE!

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FAQs

  • No, you don't need to put down 20% to buy a house. The amount of down payment you need depends on the loan you get.

    The typical downpayment for an FHA loan is 3.5% of the sales price.

  • Closing costs are in addition to your required downpayment, and can be paid by the buyer or the seller. They are comprised of third-party invoices, title fees, and lender fees. On average, you can expect to pay between 3% - 5% of the loan amount, so it is a good idea to obtain a loan estimate up front.

  • Mortgage lenders typically require the use of your lowest, mid score of between all borrowers on the loan application. Not all lenders require a credit score, but typically 580 is the minimum. This varies by product so you should speak to your lender representative about this in greater detail.

  • Mortgage insurance, also known as private mortgage insurance (PMI), is a policy that protects the lender in case a borrower defaults on their mortgage.

    It's usually required when the down payment is less than 20% of the home's appraised value or sales price.

    Government loans all require mortgage insurance.

  • Since your cash due at closing largely depends on the contract negotiations between you and the seller, there is no black and white answer. The final amount due at closing is available after loan approval is issued and all invoices have been received.

  • The ability to finance a home with another party is generally allowed, you do not have to be married or have a familial relationship. However, there is one exception to this fact and that is for VA loans. The VA does not allow a non-veteran on the loan, or have ownership interest, unless they are a spouse or also have VA benefit entitlement.

  • A regular home inspection is not required, but we highly recommend them. Any repairs you may want can be identified with a thorough home inspection during your option period, if your contract allows for one.

  • A traditional home inspection is different than an appraisal inspection. The appraiser is a disinterested third-party that works on behalf of the lender to ensure it meets the loan type requirements and establishes the market value regardless of contract price.

  • If you cannot pay out of your pocket the realtor commission you agreed on, your representative must negotiate the sale price to include the realtor commission. As loan programs evolve and depending on the product you are qualified for, you may or may not be able to finance the commission. Currently, not all programs allow and it is our advice you negotiate it in the contract price.

  • In most cases, absolutely! This is called Gift Funds, but usually cannot be received on an investment loan. There is a process to document gift funds and it cannot be received in the form of untraceable cash. Always get step by step instructions for gift funds directly from your mortgage representative.