- Organize your documents
If you are buying a home please gather the following items:
- Original fully executed sales contract.
- Pay stubs covering most recent 4-week period.
- W-2 forms for the last 2 years.
- Last 2 years tax returns if self-employed or have income other than salary (i.e.: commissions, large bonuses, etc.).
- Last 2 years corporate returns and year to date profit and loss statement (if incorporated).
- If you own rental property, please provide rental agreements and two years tax returns.
- Copies of bank statements for the most recent 3 month period, if received quarterly then the most recent quarterly statements, if passbook then a copy of the entire book including cover).
- Copy of divorce decree, if applicable.
- Check for $450.00 application fee made payable to Residential Home Funding Corp.
- Copy of Green Card if not United States citizen.
- Copy of complete bankruptcy filing including discharge, if applicable.
Getting qualified before you apply for a loan can help you understand how much you can borrow.
When buying a house you can get pre-qualified or pre-approved. You can typically 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 have to go through a more rigorous process, which includes 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:
- Find out the maximum house you can buy, so you don’t waste time looking for properties you cannot 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.
To shop for a loan you will need to:
- Think about how long you plan to keep the loan. If you plan to sell the house 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.
- Understand the relationship between rates and points. Points are considered to be prepaid interest and are tax deductible. Each point is equal to one percent of the loan. So for example 1 point on a $150,000 loan is $1,500. The more points you pay, the lower the rate you will get.
- Compare different programs. Shopping for a loan can be difficult. With so many programs to choose from, each of which has different rates, points and fees, it’s hard to figure out which program is best for you. That’s where an experienced loan officer can help you make a decision that’s best for you.
- Review closing costs. There are generally 3 categories for your loan closing fees: loan costs, escrow/title costs, and prepaid items.
Once your loan application has been received we will start the loan approval process immediately.
This involves verifying your:
- Credit history
- 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:
- Fill out the loan application completely.
- 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.
- Do not go out of town around the closing date. If you do plan to be out of town when your loan is expected to close, you may sign a power of attorney, to authorize another individual to sign on your behalf.
After your loan is approved, you will be required to sign the final loan documents. This will normally take place at your attorney’s office or title company’s office.
Be prepared to:
- Bring a cashiers check or certified 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. Your loan will normally close shortly after you have signed the loan documents. On refinance and home equity loan transactions federal law requires that you have 3 days to review the documents before your loan transaction can close.