This section will answer any questions you may have about the lending process and the time frame involved. This knowledge will help you better understand the process so that you are comfortable with the transaction and know what to expect from your loan agent and processor.
The type of loan you are applying for will determine the length of time required for closing your loan. Different loan types require different documentation. As an example, if you have good credit and lots of equity in your home you may qualify for automated processing and it is sometimes possible to close in less than 15 days. Your loan agent will walk you through the process up front so you will know exactly what to expect. Typically, most loans take 3 to 4 weeks to close.
Please select a process you have questions about. If you still have questions, please contact us at info@999investmentsinc.com.
Lending Process Questions
When should I talk to a mortgage lender?
The short answer: when you start thinking about buying or refinancing a home. It's true you can't actually apply for a mortgage until you've chosen your home and signed a contract to buy it. But you shouldn't wait until then to start talking with a mortgage lender.
We can work with you closely to determine how much house you can afford, help you decide what loan works best for first time home buyers, and perhaps make suggestions that could make it easier to get the best mortgage for you.
Another advantage of starting early is that you'll already have a good relationship with a lender when it is time to apply for your mortgage.
Where do I begin?
First, think about what you want (or don't want) and what you like (or don't like). Plan ahead and make decisions about what type of loan fits your needs. Questions you may want to ask yourself include.
- Where do I want to live?
- How much can I afford?
- What type of home do I want to buy?
- What will my ongoing responsibilities be once I buy my home?
I really want to own a home but I'm not sure I can afford it... Where do I start?
Lots of people don't even consider buying a home because they're afraid they can't afford it. But for most people, home ownership is within reach - especially with some of the special programs for first-time home buyers. In fact, for many, home ownership is as affordable as renting - in some cases even more affordable. The best place to start is with us who can provide you with a multitude of loan products.
How much house can I afford?
Before you start looking at homes, you need to have some idea of what you can afford. The mortgage amount you can qualify for depends on your household income as compared to other debts such as auto and student loans. You will also have to pay a downpayment and closing costs up-front from savings. However, you may be able to take advantage of special loan programs for first time buyers to purchase a home with a lower down payment and easier income requirements.
If you'd like to know exactly how much you can afford, talk to one of our loan consultants by calling 1.866.283.0999 EXT. 100.
How much money should I put down?
The main thing to remember here is that your down payment has to be "sourced" and "seasoned". What that means is the lender will verify that it is indeed your funds and they typically want to see it in an institution for a period of time such as three months. You may have to show several months' bank statements. If you have $20,000 under your mattress you cannot use it for a down payment.
Exceptions to every rule right? Well, there are a few loans that do not source or season the funds. AND, of course there are programs that allow gifts for down payments but those funds usually have to be sourced too.
FHA: Requires 3.5% down payment unless you are using one of the gift programs. (Still 3% if it is a gift) Closing costs may be paid by the seller and/or part of them may be financed in the loan. The LTV can actually go as high as 97.75%.
Conventional: Fannie Mae and Freddie Mac require 5% down.
Which type of loan should I select?
How do I know which type of mortgage is best for me?
There isn't a single, simple answer to this question. The right type of mortgage for you depends on many different factors:
- Your current financial picture;
- How you expect your finances to change;
- How long you intend to keep your house;
- And how comfortable you are with your mortgage payment changing from time to time.
For example, a 15-year fixed-rate mortgage can save you many thousands of dollars in interest payments over the life of the loan, but your monthly payments will be higher. And an adjustable rate mortgage may get you started with a lower monthly payment than a fixed-rate mortgage -- but your payments could get higher when the interest rate changes. The best way to find the "right" answer is to discuss your finances, your plans and financial prospects, and your preferences frankly with a us.
How will my credit history impact my ability to get a mortgage?
Many home buyers are very worried about this issue. Although many people have excellent credit, you can be better prepared if you get a copy of your credit report to review before you apply for your mortgage. That way, if there are any errors you can take steps to correct them before you make your application.
If you have had credit problems, be prepared to discuss them honestly with your loan consultant. As a responsible mortgage broker, we know that there can be legitimate reasons for credit problems, such as unemployment, illness or other financial difficulties. If you had a problem that's been corrected, and your payments have been on time for some time, your credit may be considered satisfactory despite previous problems.
Application Process Questions
How do I apply for a loan?
Contact our friendly and professional loan staff at 1.888.283.0999 Ext.100, or submit an online application. We will assist you through the application process and even guide you with filling out the application and submitting the documentation required to process your loan.
During the application process, your loan agent will...
- help you decide on a program and loan type that's right for you
- gather information for your loan application and explain all the forms
- ask you to sign the loan application
- setup an appointment for an appraisal on your home
- provide you with a loan kit that has information and disclosures explaining your rights and the loan process
Do they really need to know everything about me for the application?
It may seem that way -- but actually what your mortgage lender needs to know about you is your employment, finances and credit history, and information about the home you are buying. However, you will need to provide quite a few details about these topics, and your application process will go much more smoothly if you're prepared. Be sure to ask us what information you'll need in order to complete your application.
What does my monthly mortgage payment include?
For most homeowners, the monthly mortgage payments include three separate parts: a payment on the principal of the loan (that is, the amount borrowed); a payment on the interest; and payments into a special account (called an escrow account) that your lender maintains to pay for things like hazard insurance and property taxes. These elements are called P.I.T.I. (Principal-Interest-Taxes-Insurance).
What happens after I submit an application?
After your application and documentation is received, we forward it to underwriting departmentwho verifies and validates all of the information to be true and correct. Verification requests may be sent to your employers, mortgage holder/landlord and lending institutions. This is done by fax when possible. When all the information is collected the processor then verifies that basic lender loan requirements have been met. The completed package (including the appraisal and title report) is then sent to the underwriting department. The time it takes to process your loan varies and can be delayed when third parties do not respond to the validation requests or appraisals don't take place as scheduled. If your loan qualifies for automated underwriting the documentation requirements are often reduced and the process can be completed in a shorter time.
Once processing is complete, the underwriting department reviews your loan package to make sure it conforms to all the guidelines required for that loan product. They also review the appraisal and title report and may do additional validation of employment, mortgage payments, and credit. And, anything else they feel is necessary to document your loan. They have ultimate power and decision authority to determine if you have met the qualifications for the approval of your loan. If any documentation is missing, inaccurate, or does not agree with the signed loan application, loan processing will be suspended until the documentation requirements are met.
Appraisal Process Questions
How does the appraisal process work?
Having an idea of what is involved in appraising a piece of property can greatly help in maximizing the appraised value and avoiding costly details and re-inspections. The appraisal process consists of several steps. The following are the major steps in the sequence normally followed by appraisers:
- Research the subject property as to size, bedrooms, baths, year built, lot size and square footage.
- Gather data of recent sales in the subject property's neighborhood. The appraiser needs to locate several similar homes that have sold in the neighborhood. The homes should be close to the subject property and sold recently. These homes are considered the "Comparable Properties" or "Comps" for short. The asking price for currently listed properties for sale will not be used for comparable values.
- Field inspection consists of two parts: first the inspection of the subject property, and second, the exterior inspection of the comparable properties that have been selected to estimate the value of the subject property.
- The subject inspection usually consists of taking photos of the street scene, front of the home and rear of the home, which may include portions of the yard. The appraiser will make an interior inspection for condition, noting any items that would detract from or add to the value of your home. He or she will also draw a floor plan of the home while doing the inspection.
The inspection of the comparable properties is limited to an exterior inspection. For features which cannot be seen from the street, the appraiser has reports from Multiple Listing Services (MLS), county public records, and appraisal files along with other sources to help determine the condition and amenities of the comparable. After the field inspection has been completed, the appraiser must determine which comparable properties most resemble the subject, making slight adjustments in value for any differences between them. After making the required adjustments, the appraiser must go through the reconciliation process with the comparable properties to determine a final estimated value. This method of estimated value is called the "Direct Sales Comparison Approach to Value", and it is usually used to determine the value of single family homes.
It is important to consider that the appraiser will usually be taking photos of the street scene and of the front of the subject. The street scene gives the lenders some kind of idea as to the type of neighborhood in which the home is located. The photo of the front of the home gives the lender an idea of its condition and its curb appeal. And lastly, a photo of the back of the home and part of the rear yard is taken. Many homeowners don't take care of the rear portion of their homes and back yards, so for this reason the rear photo is required.
An appraiser will call in advance to set up an appointment to inspect your home. At that time, offer to supply any information about the home size, number of bedrooms, bathrooms, pool, enclosed patio, etc. The more that is known about the property prior to inspection, the better the appraiser can focus on researching the most similar comparable. "Doing your homework" will maximize your chances of having a good appraisal.
While your home is being inspected, don't follow the appraiser from room to room causing distraction. Instead, allow the inspection to go smoothly. In case the appraiser has any questions, be close by to answer them. The time to mention the things you think are important is either before or just after the inspection.
If you have a swimming pool the pool may need to be in a condition for use based upon the season.
If you are conducting any repairs or remodeling at the time of inspection the appraiser may not be able to complete the appraisal until the work has been completed.
Closing Process Questions
What happens before the loan closes?
After an underwriter is done reviewing your loan, he/she will send "conditions to close" to your loan funder. These are normally just specific requirements for further documentation to support your loan application. When these requirements have been satisfied, the loan funder will give a final approval and "clear to close". The loan agent will contact you and arrange a convenient time for you to meet with a signing or settlement agent to complete the final loan documents.
At the loan closing, you will meet with a signing or settlement agent to...
- review all the loan documents and file
- verify the total assets
- sign your final loan documents
- arrange for the transfer of funds (in some states)
What happens during the loan closing?
The closing usually takes place at the office of a title company or attorney in your area who will act as our agent. If you are purchasing a new home, the seller may also be at the closing to transfer ownership to you, but in some states, these two events are scheduled to happen separately. During the closing you will review and sign several loan papers. The closing agent or attorney conducting the closing will usually be able to answer any questions you have or if you prefer, you may contact us. Just to make sure there are no surprises at closing, your Loan Consultant will contact you a few days before closing to review your final fees, loan amount, first payment date and advise you on the documentation you will be signing at the closing.
What documents will I have to sign at the closing?
The following are the most important documents that you will be required to review and sign at the closing:
HUD-1 Settlement Statement
This document provides an itemized listing of the final fees charged in connection with your loan. If your loan is a purchase, the settlement statement will also include a listing of any fees related to the transaction between you and the seller. If this loan is a refinance, the settlement statement will show the pay off amounts of any mortgages that will be paid in full with your new loan. Most items on the statement are numbered according to a standardized system used by all lenders. These numbers will correspond to the numbers listed on the Good Faith Estimate that will be provided in your Welcome Kit. This document is also commonly known as the closing statement and both the buyer and seller must sign this document.
Truth-in-Lending Statement (TIL)
This document provides full written disclosure of the cost and terms of a mortgage, including the annual percentage rate (APR). It is the same as the TIL that you received immediately after your initial application, except it has been updated to reflect the final rate and fee information. Federal law requires that all lenders provide you with this document at closing.
Note
This is the document you sign to agree to repay your mortgage. The note will provide you with all of the details of your loan including the interest rate and length of time to repay the loan. It also explains the penalties that you may incur if you fall behind in making your payments.
Mortgage / Deed of Trust
This document pledges a property to the lender as security for repayment of a debt. Essentially this means that you will give your property up to the lender in the event that you cannot make the mortgage payments. The mortgage restates the basic information contained in the note, as well as details the responsibilities of the borrower. In many states, the document is called a deed of trust instead of a mortgage.
If your loan is a refinance, Federal Law generally requires that you have three days to cancel a new mortgage after you sign the documents. This means that the loan funds won't be disbursed until three business days have passed. The closing agent will provide more details at the closing.