The Loan Process with Pro City Mortgage
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You will experience one on one personalized service from the initial application through funding. We encourage face to face meetings whenever possible so you can see and trust that a real professional will handle your loan.
The Loan Process begins with an initial consultation between you the borrower and your mortgage specialist. During the first conversation, it is extremely important for you to discuss what you hope to accomplish. It is then the duty of your mortgage specialist to best determine how to accomplish that goal. A written applicaton will be taken to gather important information and you will get to have some of your questions answered. Remember to be upfront and truthful about all the facts as this will result in the most accurate return of facts to you and prevent speed bumps down the road.
After the application, one of the very first things your mortgage specialist does is review your credit and risk factors. We will examine not only the credit scores but do a line by line analysis of your report and highlight any information that could be considered derogatory. Once the risk factors have been identified and taken into consideration, you will get to discuss your strengths and weaknesess and get an understanding of what terms might be available to you.
After deciding on the loan program, you must supply the necessary income and assets documents (W2's, paystubs, bank statements, etc.) as required by the lender. These documents are essential to the underwriting process and the loan package cannot be submitted without them. It is vital that you provide them to your mortgage specialist as soon as possible. At this time your loan can be locked and made safe from any market changes.
An appraisal must be provided to support the current market value of the property. All loans are based off the overall value of the property as collateral. It is crucial to get the appraisal done right away to determine this major piece of the puzzle. Appraisers are paid for their services up front or at the time of inspection and usually can be completed in one hour.
After all of the documentation is collected we will send your loan package to underwriting for evaluation. Underwriters will then decide if the information provided matches your application and verify the facts. Soon after your loan is approved you will be contacted again to explain the terms of your approval including any loan conditions that need to be met prior to closing. It is common that they want to see additional information to make a final determination or get clarity on certain items. Documentation requirements vary, depending on the loan program, lender, and your personal scenario.
After all conditions are met your loan will be "clear to close" and the legal documents for your loan will be ordered. The finish line is just around the corner! Once documents are received by the title company, they will prepare your documents for signing. Once signed, the docs will be sent back to the lender and they will do a final quality control check on your file to ensure accuracy and compliance. Once all lender conditions have been cleared, your loan funds will be wired to the title company who will disburse all payments and funds to the appropriate parties. Once confirmation of your documents being recorded has been received, your new loan is official!
FHA vs. CONV loans
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There are certain scenarios when one or the other may make the most sense. Make sure to ask your mortgage specialist about whats best for you. The main advantage of a FHA vs. a CONV loan is that the qualifying criteria is not as strict as conventional loan financing and the down payment or equity requirements are less. When comparing a purchase money FHA loan vs. a CONV loan, the FHA loan will generally have the least amount of money required to close. FHA loans will also allow the borrower who has had a few derogatory marks on their credit or those without traditional credit history to buy a home. An FHA Underwriter will require a reasonable explanation of these derogatories, but will approach a person's credit history with common sense underwriting. There are benefits to both loan types. CONV loans have interest rate advantages for excellent borrowers and low risk factor loans. There is no mortgage insurance required under 80% loan to value loans and no up front mortgage insurance premiums on any CONV loan. FHA loans offer a special streamline refinance option with limited documentation needed if you already have an FHA loan.
What is a FHA streamline?
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FHA Streamline loans are very attractive because they don’t require income verification or current home appraisals in most cases and allow borrowers to take advantage of improved mortgage rates. If you have an FHA mortgage, you’ve already passed the qualification checks and proven you are a good credit risk for an FHA-guaranteed loan. Because of this, you can improve your loan terms at a reduced cost.
There are just a few minimum qualifying factors to consider so contact your mortgage specialist now to discuss them and see if you can take advantage of this special product.
Benefits of Homeownership vs. Renting
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Pride of ownership is the number one reason why most people yearn to own their home. Owning means you have the freedom to paint the walls any color you desire, turn up the volume on your stereo, attach permanent fixtures and decorate your home according to your own taste.
Home ownership gives you and your family a sense of stability that renting can not. No one can force you to leave the home you own. Paying off your home also gives you financial stability in your retirement years and provides you with assets to pass along to your heirs. Being able to access the equity you have earned or paid in an emergency can give you piece of mind and security that you can handle unexpected emergencies.
There are also mortgage interest and property tax deductions that can reduce your overall tax liability. You can even sell a primary residence for a profit without paying federal income tax on the sale as long as you have lived there 2 out of the last 5 years.
Often times payments are even lower than renting. Ask your mortgage specialist now to let you know how much you can buy for what youre paying in rent! Shall we say “stop paying off someone elses dream!”
Buyers – take the first step
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Get your financial house in order first and determine what you can afford. A written household budget will help you determine how much each month you are comfortable with and whether youre ready to buy.
Know your credit and clear up derogatory credit. The better your credit the better chance of loan approval and the better your loan terms will be. Errors on credit reports are common, don’t let them stand in your way. If you need help understanding your report or removing old or inaccurate info, we can help.
The difference between prequalification and Bank Approval!
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Let’s start with the difference between the two. Prequalification is a simple one step process to gather information. The information about you is used to calculate risk and convey to you facts about what you might likely be able to afford and predict what a banks results will be. This is an important step in your education about buying a home and can reveal if you are ready as well as any risk factors that might need to be worked through. Preapproval is the act of making the prequalification reality! Documentation and proof of the information is provided to an underwriter who can review and approve your loan based on verified facts. This has many more benefits. The first being no matter who the seller is, they will know you are serious and capable of buying that home. A bank approval is also required by many bank owned homes and short sales before you can even submit an offer. Finally, and maybe most important, it gives you confidence in knowing that because you’re approved you wont be taking much risk. When you find something you like, you can go after it! Call now and get your loan prequalification and bank approval with Pro City Mortgage.
