There is more to understanding the home purchase process than simply finding a home, making an offer, and closing the deal. That's why Mortgage Loans Online is here to make things easier on you.
What Can You Afford?
The first part of the home purchase process is finding out how much home you can actually afford. This is based on how large a down payment you have, plus what kind of monthly payments you can afford.
When you contact Mortgage Loans Online, we'll work with you to compare your monthly income to your monthly obligations (debts) and determine how much you'll have available each month to spend on a home loan. This information will give you a great place to start. It also means you're less likely to suffer the heartache of falling in love with a home you can't afford.
At Mortgage Loans Online, we'll tell you exactly what documentation you'll need to have on hand when the time comes to secure your loan. We'll even pre-qualify you. Being pre-qualified means you have conditional proof of your ability to obtain a loan from us, up to a specified amount, which puts you one step closer to a purchase.
Finding Your Dream Home
Now you're ready to house hunt-that means finding the house you can afford and wish to purchase, making an offer, and coming to an agreement. A buyer's real estate broker or agent can help you with this process and will represent your interests and not the interests of the seller. You should consider working with a broker/agent who can provide you with valuable information regarding the neighborhood of your dream home, current housing prices, negotiation advice, and other tips.
Once you've found the home of your dreams, it's time for the loan. To get the loan you need, just provide your Mortgage Loans Online loan advisor with a copy of your purchase agreement, a completed loan application and all required documentation. Mortgage Loans Online will promptly process your loan application and, if all requirements are met, soon you'll be one of America's new homeowners.
What You Need to Provide
Before your loan application can be underwritten, you will need to supply Mortgage Loans Online with certain personal documentation. This may include:
- W-2 Forms: These allow the underwriter to scrutinize your income and job history, which will directly affect your buying power and help reveal how great a risk you might be to the lender.
- Profit-and-Loss Statements (for the past two years): If you're self-employed, this helps substantiate your income. If your gross income appears low, remember your business expenses are often "written back" in tax deductions. Lenders usually require profit-and-loss statements, at least for the current year (year-to-date).
- Pay Stubs: These will help confirm current your income level and verify your employment. Upon closing, most lenders will reconfirm your employment, especially if a substantial amount of time has passed since the loan was underwritten.
- Bank Statements (three months' worth): Statements for your checking, savings and other accounts indicate your resources. Underwriters generally hope to establish that the average amount required for a down payment has been maintained over time, not recently obtained.
- Other Assets: These include the value of bonds, stocks, life insurance, retirement funds, jewelry, automobiles, etc.
- Investment Statements: Include these statements for stocks, bonds and other investments.
- Tax Returns (two years' worth): As a borrower, these returns provide a wealth of financial information. Underwriters look for red flags that could reveal an unforeseen debt in the case of an audit.
- Liabilities: These include creditor names and outstanding balances for all debts including notes payable, 401(k) loans, life insurance loans, stock pledges and alimony.
- Telephone Numbers and Addresses of Your Workplace: These allow the lender to verify your income.
- Real Estate Owned: This includes property address, market value, outstanding liens, rental income, mortgage payments, taxes, and insurance and maintenance dues.
You'll also need to provide information about the property you plan to buy. This includes:
- Purchase Contract
- Planned Unit Development (PUD), Condominium or Co-Op
- Name of development or project
- Phone number of the homeowner's association (if available)
- New Construction:
- Year the land or lot was acquired
- Original cost of land/lot
- Amount of liens
- Estimated cost of construction
What Goes On At Our End
After you submit the property information for approval, we'll order your title and escrow settlement. If you cancel the loan after title work has been ordered, you may be responsible for preliminary title fees charged by the title company.
Next, a qualified appraiser will look over the property and submit a report to us. This lets us determine if the home is worth enough to support your loan. A final underwriting will take place that involves analyzing the appraisal report and your ability to repay the loan to determine our risk as a lender.
Once your loan has been pre-approved, the next step is to decide whether you will lock your rate with us. Locking in your rate ensures that your interest rate won't increase before you close your loan. Rate lock options include 30, 45, or 60 days. However, timing is everything, and locking may not be the right choice for you. It's best to consult with your Mortgage Loans Online loan advisor.