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Mortgage Process

Mortgage Application Checklist

Here is a Mortgage Application Checklist of supporting documentation you will need for a prompt mortgage closing. It’s pretty inclusive and covers most of the paperwork you will need whether you are applying for a Conventional, FHA, USDA or a VA mortgage.

Identification: You will need to provide a color PDF copy of your:Application Checklist
• State Drivers License
• Work Visa and/or Green Card
• US Military ID
• State-issued Non-Drivers ID

• If you are currently renting, be prepared to supply:
    ο  Addresses for the past 2 years including name of all landlords, their addresses and telephone  numbersFamily Finances
• If you own your current home:
    o  Provide copy of most recent mortgage statement
• If you own more than one property:
    o  Provide property address(es)
    o  Copy of current mortgage statement
    o  Estimated value of each property
    o  Tax, insurance and annual maintenance cost for the property
    o  Copy of current tax bill
    o  Amount of Condo fees

Employment: Lenders want to see a 24 month job history and will need:
• Employers name, address and phone number
• Letter of explanation for any job gaps

• Copy of all W2 and/or 1099 forms for the past 2 years
• 2 most recent pay stubs
• Signed tax returns for the past 2 years if you work on commission, are self-employed or wish to use interest, dividend or bonus income as sources of income to repay your loan.
Note: It’s a good thing to have a copy of these returns handy even if you are a W2 employee as some mortgage programs will want to review information as to number of persons and potential source of other income in the household
• Signed year-to-date Profit & Loss if you are self-employed
• Copy of Business License & Letter from CPA verifying 2 years of self-employment history
Note: Alimony, child support and separate maintenance income need not be revealed if you chose not to have it considered for repaying your loan

Deposit and Savings Account: You will need to verify the source of all monies being used for your down payment, closing costs and cash reserves.
•For all checking, savings, 401k, IRA and mutual fund portfolios, you will need to provide:
    ο  Copies of last 2 months bank checking and savings account statements (all pages, front and Passbookback) where deposits are held
Note: Any overdraft history in these accounts is considered a sign of “financial irresponsibility” and could adversely affect your application.
    ο  Copies of last 2 months 401k, IRA and mutual fund statements for past 2 months
• Explanation and documentation of the source of any large deposits made to these accounts in the last 2 months
Note: The source of any Gift Funds you expect to use toward your down payment and closing costs is always been a problem. Check with your Mortgage Professional as to who is eligible to provide these Gift Funds and the documentation required to verify the source.
Do Not deposit any cash or checks received as wedding gifts into your accounts. It could prove to be a paperwork nightmare. Check with your Mortgage Professional on the best way to handle this situation.

Property Information:
• Complete address of the property you intend to buyHome for Sale-Sold
• Copy of the Purchase and Sales Agreement for the Property signed by all parities
• Name and contact information for all real estate agents involved in the transaction.
If you are purchasing a condominium or PUD, be prepared to provide:
• Name of the Condominium Development
• Name, address and phone number of the Association’s management company
• Confirmation as to whether the Association is, or is not, FHA approved
• Copy of the Association’s Master Insurance Policy

Veteran’s Administration Loan Applicants: If you are applying for a VA Mortgage, you will need to supply:
• Military Discharge Papers (Form DD214)
• Certificate of Eligibility

Other Important Information You Will Need to Provide:
• Name and contact information of the attorney who will represent you in the transaction
• Name and contact information of your Insurance Agent
     o Evidence that adequate Homeowners Hazard Insurance will be in place at time of closing
• Letter of Explanation for any Inquiries that appear on your Credit Report in the last 60 days
• Copy of Divorce Decree (all pages) if applicable
• Copy of Bankruptcy Discharge Notice

The Keys to New HomeThe Spring inventory of good homes on the market is shrinking and prices are going up. Interest rates are positioned to go up too! Now Is the Time to Buy!

Call Me @ 860.945.9284 to discuss the right mortgage option for your family and to take advantage of my FREE  Mortgage Pre-Approval service. 
I am committed to helping your family live comfortably and financially secure in your new home with the Right Mortgage and the Right Rate!

Mortgage Process

What’s The Difference Between Mortgage Pre-Qualification and Mortgage Pre-Approval.

Finding your First Home can be a stressful experience. Home for SaleFinding the right mortgage loan for your family just adds to the anxiety. That is why it is so important to understand the Mortgage Process and The Difference between Mortgage Pre-Qualification and Mortgage Pre-Approval.

You’ll hear about two ways of estimating your borrowConfuseding power: Mortgage Pre-Qualification and Mortgage Pre-Approval. These terms appear to be similar, but are quite different. Not only do they cause confusion for home buyers, there seems to be many interpretations from those in the real estate and mortgage industry as well.

The real the difference between the two terms is that a Mortgage Pre-Qualification is based on verbal information provided by the buyer. With a Mortgage Pre-Approval, the buyer supplies written documentation of all information they claim to be true. Neither is a considered to be a mortgage commitment, nor a written mortgage guarantee. However, obtaining a Mortgage Pre-Approval Letter is more preferred than obtaining a Mortgage Pre-Qualification Letter. Remember…they are not the same thing.

Getting Pre-Qualified for A Mortgage
A Mortgage Pre-Qualification is just an estimate of how big of a house you can afford and how much money a lender might be willing to loan you. The best time to get Pre-Qualified for A Mortgage is right at the beginning of your home buying process, before you even start looking at houses.

You simply talk to a Mortgage Professional, probably on the phone, and verbally provide information on your income, your assets, debt, and your potential down payment Handshake amount. The loan officer will also ask for your social security number and permission to order a credit report. After the credit check is received, he will talk to you about your mortgage options and provide you with a ballpark figure, in writing, of how much he thinks you could afford for a monthly mortgage payment and how much house you can afford.

The Mortgage Pre-Qualification Letter might say something like: Congratulations, After reviewing your credit report,  the income information and the down payment availability you have shared with us at this time; you are Pre-Qualified for a 30 year fixed rate mortgage loan in the amount of $__________ sufficient to purchase a single family residential property selling for up to $_______.

The Mortgage Pre-Qualification Letter will always include disclaimer information such as: This Mortgage Pre-Qualification is not a commitment to lend. It is contingent upon: Receipt of an acceptable appraisal of the property; Seller concessions of up to 6% of the sales price to be applied to your closing costs (if you need them); and something like Final review of your complete application package by our underwriter. In other words, we will give you a mortgage when we see that the information you told us about is correct and meets certain qualifying standards.

There should be no cost involved and there is no commitment on either side. This estimate is just helpful in helping you figure out if buying a home is a viable option, and if so, what your price range will probably be. Getting Pre-Qualified for a home loan is a good first step that will let you know if you should proceed to the Pre-Approval process.

Getting Pre-approved for a Mortgage
Mortgage Pre-Approval is the next big step. This process is Get Pre-Approvedmuch more involved. Basically, you are formally applying for the mortgage loan that will ultimately finance the purchase of your new home.
The mortgage application process involves providing documented evidence that will satisfy the underwriting criteria and guidelines for the type of mortgage loan you’ve discussed with your mortgage professional. Conventional, FHA, or USDA mortgages have different underwriting guidelines and specific qualifying criteria for verification of income, income qualifying ratios, verification of down payment, cash reserves after closing, credit scores and work history, among others.

The process is not quick and not necessarily easy. But, most REALTORS® will tell you that getting Mortgage Pre-Approval is the key to getting the home you want. Agents and Sellers will know you are serious about buying when it’s time to make an offer. And in today’s hot real estate market, a buyer may need to act fast. If the competing buyer has a Mortgage Pre-Approval in hand and you don’t, they win.
   •    Knowing exactly what type of home loan you can  obtain will allow you to shop and negotiate with confidence. For example, you could inform a seller that you have Mortgage Pre-Approval and you are prepared to close as soon as the inspectioPurchase Contractns are complete and the appraisal has been approved…less than 30 days.
Keep in mind; once the seller signs a Purchase contract, they have to take their home off the market. The ability to close quickly, because you have Mortgage Pre-Approval is one way to get a great deal.
    •    And just as important, you, the buyer, will be more relaxed in spending money to hire an Attorney for contract review, providing the earnest money deposit, hiring a home inspector to perform the home inspection, termite Home Inspectioninspection, radon inspection plus any other required inspections and paying for the mortgage application and appraisal fee.
Why? You are concentrating on the home you have purchased, and not worrying about whether they are going to get a mortgage to buy this dream home. It’s already been done!

Only a Mortgage Underwriter Can Issue a Mortgage Pre-Approval
Loan Officers can not issue a valid Mortgage Pre-Approval Letter. A valid Mortgage Approval has been underwritten by an authorized underwriter (an underwriter is the final person that says your loan is approved). If an Loan Applicationunderwriter Pre-Approves your application upfront, issues you a valid Mortgage Pre-Approval Letter, all you have to do is find the home you want, have it inspected and appraised, and  you should be able to close in less than a month.
That’s a big bargaining chip in today’s market.

Click Here for What Paperwork You Need for Mortgage Pre-Approval:Mortgage Checklist
By law, the only fee that can be collected at this time is the cost of a credit report, so be sure to ask if the Mortgage Pre-Approval service is free. Once you have Mortgage Pre-approval, it’s time to go shopping.

Once You Have Mortgage Pre-Approval:
Do Not: become overdrawn in your checking account; make any large deposits to your deposit accounts without discussing it with your mortgage professional; apply for any new credit, make any large purchases with your credit cards, use your credit cards to pay for the home inspections and/or appraisal; fail to notify your Loan Officer of any change in your employment status.
   •   The lender will pull another credit report just prior to closing, Any inquiry or any new debt could drop your credit score and “kill’ your chances for a mortgage at the terms and conditions specified in the Mortgage Pre-Approval Letter.   
   •   Overdrafts are a sign of “financial irresponsibility and large deposits will have to be explained and could delay your closing.
   •   Similarly, the lender will call your employer to verify that you are still employed. Changing jobs or a notice of pending lay-off could “kill” your  application too!

Don't Sit on The FenceThe Spring inventory of good homes on the market is shrinking and prices are going up. Interest rates are positioned to go up too!
Call Me @ 860.945.9284 to discuss the right mortgage option for your family and to take advantage of my FREE Mortgage Pre-Approval service.  I’m here to help.