An Explanation of the Loan Process

A Loan Officer will conduct an initial interview and will be requesting information from you to determine your qualifications. They will need information such as name, address, employment, yearly income, pay stubs. The documentation will be needed to determine the programs you will qualify for. One of the key factors in obtaining a mortgage is your credit score. Lending institutions will be looking at the three (3) credit scores given by Equifax, Experian, and Trans Union. The middle number of the three (3) credit scores will be what the lending institution will use as your qualifying score. In order to obtain your credit report and these scores, the Loan Officer will require your Social Security number. Remember, all information obtained is strictly confidential based on the provisions of our privacy policy.

Once the information is obtained, the Loan Officer will look at 3 key factors on their review. The three things are your qualifying credit score, your LTV (loan-to-value, which is how much you are borrowing compared to subjects value) ratio, and your DTI (debt-to-income ratio, described as how much you make a month compared to how much your credit report shows you pay in bills. The proposed mortgage and tax payment is also figured in to this number). These three items will allow the Loan Officer to find the program suited for you and discuss your options.

Once a program is selected, the Loan officer will give you a list of documents and you will need to provide to the lender in order to be approved. While you are gathering the documents, an appraisal will be scheduled for the property to confirm the stated value. You, if you are the borrower, are required to pay the cost of the appraisal at the time it is performed. You will also have to contact an insurance company and make arrangements for Homeowners Insurance. You must pay the yearly premium for the policy prior to closing on the loan.

Once all of the documents, including the appraisal have been
sent to the loan officer, a loan package will be sent to the lending institution. It will be reviewed and the bank will inform you and the loan officer if additional information is needed. Once all documents are provided, the loan will be cleared and a closing can be scheduled.

Total time from start to finish is normally about 2-4 weeks, depending on the program and documents needed. Remember, refinancing usually takes longer than a purchase.