Arranging Your Loan

• Loan Application Checklist
  Lists the documents and information typically needed to complete the loan application form.
• Loan Application Paperwork
  An overview of the forms involved in processing your application.
• Loan Underwriting
  Key points to be aware of regarding the loan approval process; take special note of contingencies that may apply.
• Rate Lock
  Lock your rates only after we have provided you with a written delivery date confirmation.
• Loan Closing
  Avoid changes to your financial circumstances to protect your loan approval.
• Down Payment Worksheet {To be added}
  To assist you in determining the amount you have available for your down payment.
• Monthly Payment Worksheet {To be added}
  To assist you in estimating the monthly payment amount for your new home mortgage.

Loan Application Checklist

The amount of documentation and information required for a mortgage can seem overwhelming. You can facilitate the application process by collecting as much needed information as possible before your appointment.

Click on the Loan Application Checklist.

Loan Application Paperwork

Once you have given all preliminary information to your loan officer, your lender sends verification forms to your employers, banks, and current mortgage company or landlord and orders the credit report and appraisal. You sign a release to authorize these steps. Your lender will provide you with a Good Faith Estimate and a Truth-in-Lending Disclosure.

Good Faith Estimate

The Good Faith Estimate lists the estimated costs you will incur at closing. Some of the numbers listed on this form are prorations, subject to change based on the actual date of the closing. Others are set fees that should remain the same.

Truth-in-Lending Disclosure

The Truth-in-Lending Disclosure shows the total cost to you over the term of the loan. The calculation is based on the assumption that you own the home and make regular payments throughout the loan term.

Verification of Employment

The lender sends Verification of Employment (VOE) forms to all employers for the last two years. The employers complete, sign, and return the forms to the lender. The forms show the dates of employment, the amount of money you earned last year, and how much you have earned so far this year. The VOE documents bonuses and overtime you earned.

Verification of Deposit

Verification of Deposit (VOD) forms go to each banking institution listed on your application. The institutions indicate the date you opened each account, average balances for the last three months, and the amount of money you have in each account on the day they complete the form. Any loans or overdraft accounts you have with the bank will also be shown.

Verification of Mortgage

Mortgage companies and landlords complete the Verification of Mortgage (VOM) forms. These show the lender how much you owe, your monthly payment amount, and whether you make your payments by the due date.

Credit Report

Your credit report shows the amounts of money you owe to each of your creditors, minimum monthly payments, and your payment history. The appraisal confirms the value of the home you are purchasing for you and your lender.

Loan Underwriting

Typically, several weeks pass as these reports and forms are returned to the lender. If any delays are encountered, the loan officer may contact you for assistance. The credit reporting agency may call you to verify that the information they have gathered is correct.

Once the loan processor has collected this standard documentation, you may be asked to write letters describing your assets, income, or credit. Few loans are finalized without requests for additional information just before the package is submitted to the underwriter for final approval. At this point, you may become frustrated with the loan process.

Please remember that your lender requests these letters to assist you in obtaining your financing. Do not hesitate to discuss your concerns with your loan officer. Perhaps they can provide some additional insight into what may seem to be redundant requests.

Amount Requested

Before the processor submits your file to the underwriters for final approval, they will verify the final sales price. Make sure that copies of all addenda, such as change orders, are signed after the original purchase agreement was completed and sent to the lender. This assists the lender in determining the exact loan amount. If change orders affect the total price after this point, you may have to resubmit your loan application for the higher amount, or the lender may ask you to pay for the additional items in cash.

Approval

During your first meeting, you and your lender determine the timing to obtain prequalification. This allows us to start the home even though final approval is still pending. You will discuss additional items that you may need to obtain final approval. Several weeks after your first meeting with the lender, you should receive approval. If any of the documents requested have not been returned to the lender on time, approval may take longer.

Contingencies

Loan approvals often carry conditions of approval. The sale of a previous home, or proof of funds, is an example. Discuss any concerns you may have about such conditions with your loan officer and obtain any requested documentation as soon as possible. Once all contingencies are met, the final loan can be approved.

Loan Amount Approved

If you qualify for an amount that is less than you requested, ask your loan officer what changes might qualify you for a larger loan. Or, consider omitting some items now (a deck or finished basement) and adding them to your home later. Another possibility is to talk to another lender with different programs and different requirements.

Loan Declined

If, after your best efforts, you are not approved for a loan within 45 days of signing your purchase agreement, following your Purchase Agreement, we will refund your initial deposit upon your signing a release letter and returning this Homeowners Manual to the sales office.

Lock in your rates

The only thing anyone knows for certain about interest rates is that they will change. Do not rely on anyone’s predictions regarding rates. Locking your rate prematurely can result in extra expenses if your new home is not complete in time to close within the lock period. We are happy to update you throughout the process of construction on the target delivery date. Until we reach a point in construction where factors outside our control can no longer affect the delivery date, the decision to lock your rates is, at best, a gamble.

Closing

Between the time your loan is approved and the date of your closing, remember that any significant changes in your financial circumstances could impact your loan approval. If your closing occurs more than 30 days after the lender issues your loan approval, the lender may order an additional credit report just before the closing date. Changes in your financial circumstances, for example, purchasing a new car or increases in your charge card, will appear as a new liability on your updated credit report. Such changes may cause your lender to reconsider your approval. Holding off on such purchases until after closing is best.