FINANCING

Pre-Approval is where a lender provides a conditional commitment for a specific term and amount.

The benefits of a pre-approval are two-fold:

1. You know exactly what loan amount you can expect to be approved for, allowing you to shop for a home or below that amount.
2. Those who present a pre-approval letter with an offer on a home have an advantage over the offers that aren't backed by the power of a pre-approval.

The Loan Application

The pre-approval process begins with a loan application, which will provide your lender with a complete picture of your income, assets and debts.

Loan Documentation

You will be asked to present financial documentation that confirms the information on your application. This may include:

• Paystubs
• Proof of Income
• Tax Returns
• Employment History
• Bank Statements

Your mortgage advisor can provide you with a list of specific documents that may be needed for your loan application based on your unique situation.

Fixed Rate? Adjustable? FHA? There is a perfect loan for your unique needs.

Are you looking for the consistent rates and payments that are fixed-rate loans can provide? Do you want the short-term benefits of lower rates that an adjustable-rate loan can bring? There are plenty of options that can help you achieve your homebuying dream.

Understanding First-Time Buyer Programs

Selecting the right loan means understanding all the options available to you, which may include first-time buyer program. These tools are specifically designed to help you buy your first home, often with lower down payment requirements or more relaxed qualifying guidelines.

Down Payment Assistance

Down payments can range from no money down to 20%, depending on the loan program. Don't have the cash for a hefty down payment? There are hundreds of down payment assistance programs.

Every loan has its own set of investor guidelines that must be met before the loan is approved. Your mortgage loan advisor will work with a processor and underwriter as you progress along your home loan journey.

Loan Processor

Loan processors verify and validate your information, ensuring it's free of errors or omissions before your final application is submitted to an underwriter.

Loan Underwriter

The loan underwriter will review your application to confirm your financial profile meets the requested loan's predefined guidelines.

Requests for More Documents

You may be asked for more documentation as your loan is processed and underwritten. This is a normal stop on your home loan journey, so it's nothing to worry about.

The Three C's

Loan underwriters follow a set of guidelines known as the 3 C's when examining your loan application:

• Capacity: Can you repay your mortgage?
• Credit: Do you have a solid history of repaying debt? What is your credit story?
• Collateral: Does the sales price meet the required value for the loan amount requested?

There is a ton of activity happening behind the scenes, as multiple parties work to get your loan approved.

Before this happens, you'll receive contingent approval and a list of closing conditions that need to be met. These conditions can include verification of your current employment, confirmation that no new debt has been incurred, and proof that you've obtained homeowners insurance.

Appraisal

A written analysis prepared by a licensed appraiser that estimates the value of a property.

Title Search & Insurance

A title company researches the legal history of the property and then issues a policy guaranteeing that work.

Flood Certification

Flood coverage is not included in a standard homeowners insurance policy, but your lender will request a flood certification to see if you are in a flood zone. If you are, flood coverage may be required.

Homeowners Insurance

The property is the security for your mortgage loan, so your lender will require that you carry homeowners insurance to protect against damage from fires, wind, vandalism and other unforeseen incidents.

Once closing conditions have been satisfied, the underwriter issues a "clear-to-close" to trigger loan documents and final closing steps.

With an approved loan and a clearance, you are on the home stretch of your journey.

The lender will send closing documents to a title/escrow agent who draws up paperwork, arranges the document signings and transfers of title. You will also receive a Closing Disclosure with final terms and conditions of the loan, which must be acknowledged at least 3 days prior to closing. As always, timely acknowledgment is key to closing on time.

Who will or could be at the closing?

• An escrow/title company
• A Notary Public/Signing Agent
• Your mortgage advisor or other member from your loan team
• Real Estate Agent(s)
• Your Attorney

Signing Documents

You've reached the end of your home loan journey. You're ready to receive the keys to your new home by your agent.