Florida
Home Mortgage Loan Process
For first-time
home buyer's and as a refresher course for people who have bought
homes before, here is the general process required to obtain a
home Mortgage.
Please note,
the information below is for a Full Documentation Loan,
although there are many other less complicated programs available.
Getting
the Paperwork Ready
The loan application form asks for information on the property
you are buying, as well as the employment and financial history
of all loan applicants. The information is then verified before
deciding whether or not to make the loan, so it is very important
to make sure that it is complete and accurate.
It is easier
to complete the loan application process if you prepare for it
ahead of time. You'll be asked about your personal finances, including
bank account numbers and balances, current loan amounts and payments
and credit card account numbers. You need to be thorough and precise
in providing this information, so it is best to assemble the information
beforehand. Following is a summary of the major types of information
required on the loan application, the documents that may be needed
and the questions that you should be prepared to answer.
Details
Of Purchase Contract & Property
Because the property is security for the loan, an appraisal is
required for the property; and you will need to have the following
information available:
A complete
copy of the sales contract, including any addendum's, signed by
all parties, showing the full names of the sellers and buyers
as they will appear on the new deed, the amount of earnest money
deposit and who is responsible for closing costs, origination
fees, etc.;
If the house is to be built, or is still under construction, a
set of plans and specifications;
The complete mailing address of the property, its age, and its
full legal description; and
Name, address, and telephone number of the real estate agent and/or
the seller of the property who will assist the appraiser in obtaining
access to the property.
Personal Information
You will need to provide your and any other CO-borrower's Social
Security number, age, number of years of schooling, number and
ages of dependents, current address, and telephone number If you
have lived at your current address less than two years, be prepared
to furnish former addresses for up to seven years. You will also
be asked to detail your current housing expenses, including rent
or Mortgage payments, real estate taxes, and insurance (your Mortgage
payment may include tax and insurance funds). You will need the
name and address of your landlord(s) or Mortgage company(ies)
for the past two years.
Employment
History & Sources Of Income
Your ability to make the monthly payments on the Mortgage and
to afford the costs associated with owning a home are primary
considerations in our loan approval process and should be your
primary concern. Required information includes:
At least two
year's employment history with employer's name and address, your
job title or position, length of time on the job, salary, bonuses,
commissions, and average overtime pay;
Recent paycheck stubs and Federal W-2 forms for two years and
perhaps full Federal tax returns;
Records of dividends and interest received from investments;
If you are self-employed, full tax returns and financial statements
for two years, plus a profit and loss statement for the current
year to date; and
A written explanation if there are gaps in your employment record
due to circumstances such as illness or layoffs, or for any other
reason.
We will have you sign a Verification of Employment (VOE) form
or a general credit authorization form. This will be sent to your
employer to verify your employment and earnings. One will be sent
to previous employers if you have been on the job less than two
years.
If you are
relying on income from other sources, such as rental property,
Social Security, disability payments, child support, etc., you
must provide adequate proof of the source. Appropriate documents
could include canceled checks, copies of leases, Federal tax returns,
certification of benefits, divorce decrees, and similar evidence.
Personal
Assets
A detailed listing of your personal assets is required on the
loan application form. You will need to have the following information
available to complete the form: All bank accounts, both checking
and savings, and money market accounts with the name and address
of the institution(s), name(s) on the accounts, account numbers,
and current account balances;
Recent bank
statements for at least two months;
Current market value of stocks, bonds, CDs and other investments;
Vested interests in all retirement funds;
Face amount and cash value of insurance policies in force;
Make, model, year, and value of automobiles owned;
Address and market value of all real estate owned, along with
the amount of rents collected, the Mortgage on the property, the
monthly Mortgage payments, and a list of monthly expenses for
investment properties; and
Value of other personal property such as furniture.
As with the Verification of Employment, you'll sign a Verifications
of Deposit (VOD) (or a general authorization) for each of the
institutions where you have savings or checking accounts. Differences
between the account balances reported by the institution and the
balance you give for the loan application will have to be reconciled,
so be sure you have your correct current balances. Any recent
large deposits will need to be explained.
It is important
to identify the source of funds with which you will make the down
payment and pay closing costs and fees. Gifts from a relative,
church, employer, municipality, or nonprofit organization may
sometimes be used, but must be verified in writing. In some cases,
the donor must be a relative and must provide a letter stating
the donor's relationship to you, the amount of the gift, and the
fact that no repayment is expected. Receipt of the gift funds
must also be verified.
Personal
Indebtedness
You'll be asked to itemize all of your current bills, loans, and
other debts, including current balances and monthly payments.
Debts include automobile loans, credit cards such as Visa, Mastercard,
and other retail store accounts, finance company, bank and credit
union loans, and existing Mortgages, including home equity loans.
You should be able to give the account or loan number, the monthly
payment, the number of payments remaining, and the outstanding
balance.
The information
you provide on the loan application will later be verified by
a credit report. Like employment and deposit verification, differences
between your figures and those on the credit report will raise
questions and may delay the approval of your loan. It is to your
advantage to take time to get your data right prior to filling
out the loan application.
If you have
had credit problems, you should make that be known promptly. We
recognize that unemployment, illness, marital problems, or other
financial difficulties can temporarily impair your credit rating.
Provide a written explanation of the circumstances regarding the
problem to be included with the loan application. We will consider
such a written explanation as part of the underwriting analysis.
Chronic late payments, judgments, or loan defaults, however, severely
damage your credit standing and may prevent you from obtaining
the financing you need to complete the purchase.
If you have
been through bankruptcy or foreclosure proceedings within the
past seven years, be prepared to give full details and copies
of applicable documents regarding them.
You'll also
be asked to explain the details if you are obligated to pay alimony,
child support, or separate maintenance.
Additional
Information
You'll be asked to sign a section of the loan application form
which contains your certification that the information you have
provided is correct to the best of your knowledge; your promise
to advise us of any material changes in the information; and your
consent to verification of the application data.
The last part
of the application form requests information on the race and gender
of the applicants. The Federal Government uses this data to monitor
our compliance with fair housing and equal credit opportunity
laws. Provision of this information is strictly voluntary on your
part and has no affect on your loan application. We, however,
are required by Federal law to request the information.
Because of
the particular circumstances surrounding a loan application, we
may require additional information or documentation regarding
you or the property after the application has been submitted for
approval. We make every effort to collect all data at the outset,
but cannot foresee every eventuality. Requests for additional
information are not necessarily bad, and your primary concern
should be in responding promptly with the information.
At the time
the application is taken, you will probably be asked to pay for
the credit report and appraisal fees.
If you have
come fully prepared to the interview with the loan officer and
have provided good documentation, you have done a great deal to
assure prompt processing of your application and approval of your
loan.
After The
Loan Application...What's Next?
After the loan application has been completed, it will be turned
over to the loan processing department and then to the underwriter,
where the decision to approve or reject the loan will be made.
Loan processors call to confirm the information you provided,
or send out the Verifications of Employment and Deposit and order
the credit report, property appraisal, and other documents. The
time it takes to receive these documents affects the length of
time required for approval of the loan. If you are transferring
into the local community, it may take longer to receive the credit
and employment information.
Within three
business days after completing the application, you'll receive
a "Good Faith Estimate" of the anticipated closing costs.
It will show costs associated with the loan settlement, such as
origination fees, Mortgage insurance, title insurance, escrow
reserves, and hazard insurance.
Within the
same three days we will also send you a Truth-in-Lending Disclosure
statement. This statement shows, among other things, the estimated
monthly payment. The total cost of all finance charges on your
loan is also shown, stated as an annual percentage rate (APR).
The APR represents the dollar amount of finance charges you pay
either up front or over the life of the loan, converted to an
annual interest rate. Since the APR includes origination fees
and other charges, as well as interest on the Mortgage loan, the
APR is usually higher than the interest rate of the loan.
The Closing
Process
After your loan has been approved by the underwriter, it is sent
to the closing department. Once again, everything is checked for
accuracy and the closing package is forwarded to the approved
closing agent.
The closing
agent in this transaction represents the lender and will conduct
the closing. The closing agent at this point has run the title
search and insured that the property is able to be conveyed by
the seller without any encumbrances. The closing agent checks
the survey and makes sure that the lender has proper coverage.
The borrowers may insure their coverage in regard to survey and
other title matters by purchasing an owner's title insurance policy
issued by the closing agent.
Items typically
requested for the borrower to bring to the closing are a one year's
hazard insurance policy and paid receipt, a certified (or cashier's
check) for the cash needed for closing, and a report from a certified
termite inspector which states that the property is free from
infestation.
The closing
agent will obtain the necessary signatures on the closing documents
and disburse the money.
The last
step is to receive the keys to your new home
Toll Free
Call - (866) 323-7603