The first step in purchasing a home is to get pre-approved so you know how much you can borrower and the type of loan program you qualify for. Most Realtors and Sellers will require a pre-approval even before you view a property.

Click here to get Pre-Approved.

Once you decide to get pre-approved, there are a few things that will need to be verified and things that are considered. Below are some details to prepare you to apply.

FICO^® Credit Score

FICO^® Credit Scores are widely used by all mortgage lenders in their credit decision. It is a quantified measure of creditworthiness of an individual, which is derived from mathematical models developed by Fair Isaac and Company in San Rafael, California. FICO^® scores reflect credit risk of the individual in comparison with that of general population. It is based on a number of factors including past payment history, total amount of borrowing, length of credit history, search for new credit, and type of credit established. Most loan programs require a minimum FICO^® Credit Score, but there are also programs available for those that do not have a score.

Debt-to-Income Ratios

Employment and income history is evaluated for each loan program. Debt-to-Income is the ratio of monthly debt payments (such as auto and personal loans) to income. This would also include your new mortgage payment. As a Rule of Thumb, your monthly mortgage payments should not exceed 1/3 of your gross monthly income. There are cases where this can be exceeded based on the individuals application profile.

Assets and Down Payment

There are loan programs that do not require a Down Payment but having Assets can be a huge factor in your overall loan approval. Assets must be liquid. Cash or value of personal property cannot be used. Assets can be Checking, Savings, Money Market, Stocks, 401k, etc. When a Down Payment is required, most cases will allow Gift Funds to be used. If a borrower is using "gift funds", it must come from an acceptable donor with a signed letter stating that the gifted funds do not have to be paid back.

Once you have been pre-approved, it's now time to start your search for the perfect home. Although using a Realtor is not required, it is recommended to help you find the home, submit an offer, negotiate the sales price and any concessions and help you through any inspections. If you would like to use one of our Preferred Realtors, Click Here.

Property Type and Appraisal

Almost all loan programs require an Appraisal of the property (some Conventional Loan programs can get an Appraisal Waiver). It's important to understand the property requirements for your loan approval. We will work with you and your Realtor to ensure you are making an offer on a home that will work for your situation.

Closing Costs and Seller Concessions

There are closing costs when purchasing a home. Those include lender fees, title fees, recording, transfer taxes, escrows, prepaids, etc. Most loan programs allow the seller to pay for most, if not all closing costs (called Seller Concessions). This is part of the negotiations that are handled between your realtor and the seller of the property. We will also be involvded in cases where Seller Concessions are needed for loan approval. The Appraisal is a POC (paid outside of closing) item and required to be paid by the Buyer at the beginning of the loan process.

Property Inspection

Most loan programs do not require an inspection. There are cases where a Well, Water or Septic inspection is required depending on the loan program. Also, homeowners insurance can be drastically less in most cases when an inspection is done.

Congratulations! You are under contract!

Now that you are under contract on a home, we will begin the loan process. You will be sent a list of items to provide depending on your particular loan program that is needed for initial underwriting.

Loan Disclosures

We will get the loan set up for your initial disclosures to be signed. These are done electronically and sent out to esign. It's important that they are signed in a timely manner as they are time sensitive. Once they are signed, you will receive an email link to pay for the appraisal so it can get scheduled.

Acceptable Documentation

Documents must be provided in their entirety. Documents must be clear with nothing marked out, crossed off or partial pages. Each page of any document is required. Cell phone pictures of income or asset documents is not acceptable.

Homeowners Insurance

Property insurance is required for all mortgage loans. You are responsible for choosing the insurance company you want to use. We suggest getting a couple quotes and are happy to help assist as well.

Once you sign your initial disclosures and provide your documents, your loan file is submitted to underwriting for review.

Additional Documents

It's very common that the underwriter will request additional documentation or explanations for any items they might have questions on. It is important that you work with your processor to provide the correct documents as quickly as possible to avoid any delays.

It's Closing Day!

Final Loan Approval

Once the underwriter has reviewed your documents and everything is accepted, they issue a final loan approval. At this stage, your loan is clear to close. Closing typically takes place at a local title company or your realtor's office.