Organize your documents

If you are buying a home

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

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

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

4.Provide recent copies of any stock brokerage or IRA/401K accounts that you may have.

5.If you are NOT a US citizen, provide us with a copy of your green card (front & back), or if you are NOT a permanent resident provide us with your H-1 or L-1 visa. Owning your own home has several advantages besides the obvious satisfaction

Owning your own home has several advantages besides the obvious satisfaction you get from home-ownership. You can build equity and enjoy tax deductions, and the quality of your life is greatly improved.

 

Get Qualified

Getting 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 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:

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

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

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

 

Shop loan programs and rates

To shop for a loan you will need to

1.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.

2.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.

3.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.

 

Obtain Loan Approval

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

1.Credit history

2.Employment history

3.Assets including your bank accounts, stocks, mutual fund and retirement accounts

4.Property value

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

1.Fill out the loan application completely.

2.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.

3.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.

4.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.

5.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.

 

Close the Loan

After your loan is approved, you will be required to sign the final loan documents. This will normally take place in front of a notary public. Be prepared to:

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

2.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.

3.Sign the loan documents

 

Which loan is right for me?

Years you plan to stay in the house	Recommended program
1-3	3/1 ARM, 1 year ARM or 6 month ARM
3-5	5/1 ARM
5-7	7/1 ARM
7-10	10/1 ARM, 30 year fixed or 15 year fixed
10+	30 year fixed or 15 year fixed

Loan Programs	Advantages	Disadvantages
Fixed Rate Mortgages
30 year fixed 15 year fixed	Monthly payments are fixed over the life of the loan Interest rate does not change Protected if rates go up Can refinance if rates go down	Higher interest rate Higher mortgage payments Rate does not drop if interest rates improve
Adjustable Rate Mortgages
10/1 ARM 7/1 ARM 3/1 ARM 1 year ARM 6 month ARM 1 month ARM	Lower initial monthly payment Lower payment over a shorter period of time Rates and payments may go down if rates improve May qualify for higher loan amounts	More risk Payments may change over time Potential for high payments if rates go up
Balloon Mortgages
7 year 5 year	Lower initial monthly payment Lower payment over a shorter period of time Many balloon mortgages offer the option to convert to a new loan after the initial term.	Risk of rates being higher at the end of the initial fixed period Risk of foreclosure if you cannot make balloon payment or if you cannot refinance or if you cannot exercise the conversion option
First Time Buyer Programs
	Lower down payment Easier to qualify Sometimes you may get lower rate	May be subject to income and property value limitations Some programs which have government subsidies may have a recapture tax if you sell the house too early.
Stated Income Programs
	Don't need to verify income Faster approval	Higher rates Higher down payment
No point, No fee Programs
	No closing costs	Higher rates