Education Center

The Loan Process

The Loan Process:

How does the loan process work?

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

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 or lease agreements.
To verify assets, please provide your most recent 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.

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 be pre-qualified over the phone or on the Internet in a few minutes. A pre-qualification is not as beneficial as a pre-approval which requires a more rigorous process including verification of your credit, income, assets and liabilities. It is highly recommended you get pre-approved before you start looking for a house. This helps you by:

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

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:

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 best suited to your lifestyle and future plans.
Understand the relationship between rates and points. Points (one 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 and remember:

The Total Cost of the Loan is What Matters Most.

Apply for a Loan

Once you've gathered all your documents and have spoken with us regarding loan programs and pricing options, it's time to apply for the loan.

At the time of application, we will present you with a completed loan application and 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.

Obtain Loan Approval

The loan approval process will be started immediately upon receipt of your signed loan application and preliminary loan documents. This process involves verifying your credit history, employment history, assets (including your bank and 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 to:

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. You will need to be available for signing documents in escrow.

Close the Loan

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

Bring a cashiers check for your down payment and closing costs (if a purchase). Personal checks are not acceptable.
Review the final loan documents. Make sure the interest rate and loan terms are what you expect 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 and home equity loan transactions, federal law requires 3 days for you to review the documents before your loan transaction can close.