Frequently Asked Questions

Q -  How does the loan process work?

A - The loan process can be broken down into 6 simple steps:

1)  Organize Your Documents

For purchasing or refinancing your home/rental property:

	If you are salaried: provide your last two years W-2's and one month of pay-stubs; if you are self-employed: provide your last two years tax returns and a YTD profit & loss statement.
	If you own rental property, please provide rental agreements
	To verify assets, please provide 3 months bank statements for each of your checking, savings & investment accounts.
	If you are requesting a cash out refinance, please provide a letter explaining what you plan to do with the proceeds.
	A copy of divorce decree, if applicable.
	If you are NOT a US citizen, please provide us with a copy of your green card (front & back), or if you are NOT a permanent resident, please provide us with your H-1 or L-1 visa.
	If you're applying for a home equity loan, please provide a copy of your first mortgage note.  This will normally be found in your closing loan documents for your first mortgage.

2)  Get Pre-Qualified

Getting pre-qualified before you apply for a loan can help you understand how much you can borrow.  When buying a house, you may get pre-qualified or pre-approved.  You can get pre-qualified over the phone or on the Internet in a few minutes.  A pre-qualification is not as beneficial as a pre-approval, where you go through a more rigorous process including verification of your credit, income, assets and liabilities. It is highly recommended that you get pre-approved before you start looking for a house. This will help you by:

	Finding out the maximum house you can buy, so you don't waste time looking for properties you can't qualify for.
	Putting you in a stronger position when you are negotiating with the seller, because the seller knows that your loan is already approved.
	Allowing you to close quickly, since your loan is already approved.

3)  Compare Loan Programs and Rates

At the time you apply for a loan, we'll discuss with you available mortgage programs & pricing.  To make a more informed decision, regarding which program is more beneficial to you, you need to consider the following things:

	Think about how long you plan to keep the loan: If you plan to sell the house or refinance in a few years, you may want to consider an adjustable or balloon loan. On the other hand, if you plan to keep the house for a longer time you may want to look at fixed loans.  You need to pick the loan program that best fits your lifestyle & future plans.
	Understand the relationship between rates and points: Points (a point equals 1% of the loan amount) are considered to be prepaid interest and are tax deductible. The more points you pay, the lower the rate you will get.
	Keep an open mind regarding pricing options: Remember this phrase: The Total Cost of the Loan is What Matters Most.  To view a Total Cost Analysis report, which compares several rate/cost options, Click Here (requires Adobe Reader).

4)  Apply for a loan

Once you've gathered all your documents & have spoken with me regarding loan program & pricing options, it's time to apply for the loan.  At the time of application, I will present you with a completed loan application & preliminary loan disclosure documentation for your signature, as required by Federal Law.  You've made no permanent commitment here, you've just agreed to investigate whether you can qualify for your chosen program.  

5)  Obtain Loan Approval

Once your loan application & preliminary loan documents have been signed, we will start the loan approval process immediately. This involves verifying your credit history, employment history, assets (including your bank & investment accounts), and the value of the property in question.  Based on your specific situation, additional documents or verifications may be required. To improve your chances of getting a loan approval, be sure you:

	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.
	Continue to make on-time payments on all credit accounts, even if you plan to pay off credit accounts in a refinance.
	Avoid making credit account purchases. Any credit debt increases may prevent you from being approved.
	Do not move money into your bank accounts unless it can be traced.
	Plan to be in town around the closing date, as you will need to be available for signing documents in escrow.

6)  Close The Loan

After your loan is fully approved & loan conditions have been met, you will need to sign the final loan documents. This is typically done at an escrow or title company.  Be prepared to:

	Bring a cashiers check for your down payment & closing costs (if a purchase). Personal checks are not acceptable.
	Review the final loan documents. Make sure that the interest rate and loan terms are what you thought the were, and that the name and address on the loan documents are accurate.

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