3 Steps to Home Financing Success               

Step 1. Pre-Approval Process

Your first goal for getting financing is to getting a pre-approval.  This is probably the most important step in the home purchasing process.  With this step you can set your home budget so that it fits your comfort level. Due to the fact that your home loan will probably be your largest monthly payment, it is important to make sure it fits your budget, as well as your needs.  Also, once you know what sales price fits your needs, then and only then would you want to start looking at homes.  There can be a very big difference one way or the other in $5,000.00 in sales price.  In most cases, you are in an entirely different category if you move up or down $5,000.00 in sales price.  So, just a warning, you don’t want to be looking at a $125,000.00 home when you can only qualify for $100,000.00. You might end up very disappointed in the $100,000.00 home.

The pre-approval process starts with an application either taken by me on the phone, on-line application, or face to face, whichever is the most comfortable or convenient for you.

After I receive the application, I will pull your credit, analyze your income and work history to determine a qualifying debt-to-income.  At this point, I will give you options on financing, and together we will determine which program is best for you by taking into consideration your payment and funds you have to work with to secure the home.

I will do my best to educate you about the program we decide on so you have a full understanding about the ins and outs of any of the requirement for that program.
In most cases I handle this process over the phone and, at times, additional income back up information will be required in order to get an approval.  In most cases I will need to have two years of taxes for self- employed people to finish an approval.
With the approval we can move on to step 2, but in some cases we will have to work  together  to  get an approval if there are some credit issues or other situations that might be holding up the approval.  In all situations, I will give guidance to help you obtain an approval.

Step 2. Finding Your New Home

At this step you are working with your Real Estate agent.  I have talked to them and given them details of your loan program so we are all on the same page.  The agent will pull up a range of homes in the marketplace that will fit in the budget we decided.  Some agents will have you drive by their list first then set a schedule to see the ones you are interested in and other agents will set up a list of homes that fits your needs and go to each one with you.   In many cases, you will get introduced to an agent through friend or family member, and if you don’t have an agent I have had really good success helping my clients find a comfortable agent.

I always recommend that you have an agent working on your behalf. I believe we all need someone on our side handling the details for us, which helps reduce the stress level.  Some people believe if they work with the listing agent they will get a better deal.  I personally do not  believe that is true but I believe if you are comfortable going that direction you will be fine, but remember a listing agents primary responsibility is to their client (the sellers) and you will sign a disclosure referring to their relationship to the sellers.

From time to time customers come to me with a For Sale by owner situation.  What I have found is that you must realize you will be responsible for all the details in the transaction, contract, inspections and communicating with the sellers.  If a problem comes up, you will have to handle it or figure out a solution.  I will handle the financing the same in this situation as with a real estate agent.
Once a property has been found, your agent will write up a contract with an offer based on your input and mine.  At this point, I will send an approval letter over to the agent to go with the offer.  As soon as the contract is negotiated and secured you will move on to step 3.

Step 3 Application and Closing

After the contract has been secured, the realtor will send it to me so we can finish up the application process.  The first action will be to set an appointment up so you can bring me the following items.

  1. Drivers License and Social Security Card
  2. Most current 30 days of pay stubs
  3. W2 and Federal tax returns for the last two years
  4. Most current 60 days of bank Statements which must have bank name, account number and your name on them with all pages of the statements
  5. Most Divorce situations will require the divorce decree.
  6. Child support income will have to be backed up by 12 months  of history of receipt and continue for 3 years
  7. There may be additional documentation required based on the loan program we are using which will be disclosed when we set the application appointment.

Once I have the signed application with the required documentation, I will stack the file and send it to processing.  The processor will order verifications of employment, title and appraisal.

The file will go to underwriter for preliminary review so we are aware of any additional requested disclosures.

After we have received all required documentations, verification of employment, title and appraisal, the file goes back to underwriting for a final review.  With a successful review we will have a clear to close.

With the clear to close the file goes to our closing department and they work with the title company to finish up the final HUD which is the final financial statement that shows all the closing costs involved in the transaction.
On closing day, you will sign the final HUD and all disclosures.  At the closing you will be required to bring your driver’s license and a cashier’s check for any funds you are required to bring.   Once completed the realtor will hand you the keys to your new HOME!

This basic procedure will apply to a refinance transaction but will not have a realtor involved; I will handle all aspects associated with the refinance.