1. Organize your documents.
2. Get qualified.
3. Shop loan programs and rates.
4. Apply for a loan.
5. Obtain loan approval.
6. Close the loan.
1. If you are salaried: provide two years W-2s and one months pay stubs, or
if you are self employed: provide two years tax returns and YTD profit and loss statement.
2. If you own rental property, provide rental agreements and two years tax returns
3. Please provide three months statements for any bank, stock, or mutual fund accounts
4. Provide recent copies of any stock brokerage, 401k, or IRA accounts
5. If you are divorced, provide a copy of the Divorce Decree
6. If you are NOT a U.S. citizen, provide a copy of your green card, both
front and back, or if you are NOT
a permanent resident, provide a copy of your H-1 or L-1 Visa.
1. If you are salaried: provide two years W-2s and one months pay stubs,
or if you are self employed:
provide two years tax returns and YTD profit and loss statement.
2. If you own rental property, provide rental agreements and two years
tax returns
.
3. Please provide a copy of your first mortgage note. This can usually be
found in your closing documents
4. Please provide a letter stating what you plan to do with the cash you receive
5. If you are divorced, provide a copy of the Divorce Decree
6. If you are NOT a U.S. citizen, provide a copy of your green card, both front and back, or if you are NOT
a permanent resident, provide a copy of your H-1 or L-1 Visa.
Pre-qualifying for a loan before you apply for a loan can help you understand
how much you can borrow.
Pre-qualifying and becoming pre-approved are to different things. It is recommended that you become
pre-approved before shopping for a home.
1. Determine the maximum house you can buy.
2. Being pre-approved gives you more negotiating power with the seller,
because they know your loan is already approved.
3. Being pre-approved also allows you to close quicker than normal
by lessening the time your loan spends in underwriting.
To shop for a loan you will need to:
1. Think about how long you plan to keep the house. If you are only
planning to keep it for a few years, than an
ARM or Balloon may be better for you than a fixed loan.
2. Have a clear understanding of points and how they affect the interest rate on
your loan.
3. Speak with a loan officer to help you compare different programs and decide
which program is best for you.
Once we receive your loan application, we will start the approval process immediately; this involves:
1. Credit history
2. Employment history
3. Assets
4. Property value
After your loan is approved, you will be required to sign the final documents. This normally will take place at a Title Agents' office, usually designated by the seller.
Be prepared to:
1. Bring a cashier's check for your down payment/closing costs. Personal
checks are not normally accepted.
2. Review the final loan documents. Make sure your interest rate and
program are what was promised to you; also
double check that your information is correct on all the closing documents.
3. Sign the loan documents.
Your loan will normally close shortly after signing the loan documents, however state law requires that home equity loans and refinances have a three day right of recession, during which you have the right to review the loan documents before closing.
Back to top1. Avoid making any large credit purchases. The credit impact could
lessen your chances of getting your loan approved.
2. Manage all your outstanding accounts carefully, avoid missing any payments.
3. Contact creditors immediately if you have concerns about making payments.
4. Save money so you can have a financial cushion, in case of emergency.
These two terms can be somewhat misleading and are often easily confused. Pre-Qualification is simply determining the maximum payment that you can afford based on monthly income and debt. A pre-approval is obtained by pulling your credit and evaluating your credit rating. This gives you much more negotiating power with a seller by letting the seller know that you truly can honor your offer on their house. HC Mortgage Lending can pre-approve you on the first day.
Back to topOn average it should take 10 - 12 business days. However each situation is unique and times can vary based on your individual loan needs and the workload of the lender.
Back to topYes, in fact we recommend that you do just that. The process takes just a few minutes.
click here to figure your pre-qualification loan amount.
Yes, this process takes the pre-qualification process a few steps further. You will be required to answer a few more questions and may need to provide documentation of your income and assets. We will also pull a credit report during the pre-approval process.
FICO score is a credit score developed by Fair Isaac and Co. during the 1950's.
A credit score is a numerical value used to determine the probability that a borrower will meet their credit obligations.
Some of the things that the credit score looks at are:
1. Late payments
2. Age of credit
3. Amount of credit used vs. credit available
4. Length of time at present residence
5. Employment history
6. Negative credit information such as bankruptcies, charge-offs, collections
etc.
If you have never seen a copy of your credit report you should definitely order a 3-in-1 credit report. A 3-in-1 report pulls information from all three credit bureaus: Transunion, Equifax, and Experian.
The three bureaus do not communicate with each other, which means you have 3 different reports on file and is why you need to pull a report from all three agencies. According to a previous study, 70% of all credit reports had some kind of error on them, and of those, 29% had serious errors such as charge-offs or collections that did not belong to the borrower.
1. Maintain two or three revolving accounts that are kept in good standing
and a balance of no more than 30% of your total credit limit.
2. Avoid too many credit inquiries, as they can lower your credit score.
3. Pay your bills on time. Late payments are one of the most common and
easy ways to lower your credit score.
4. Don't apply for multiple credit lines; it triggers an inquiry that can
lower your credit score.
In many cases, a lender extending credit may never actually meet you. Most of the time, they won't have an opportunity to learn what type of a person you are or to discover for themselves if you are a trustworthy, capable individual. Often, all they have to make a judgment about your ability to pay is by looking at your credit history, which is an accounting of your ability to repay debt. When determining if they should extend credit to you or not, lenders may order one of two different types of credit reports in order to examine your credit history: This is a basic credit report, showing information from one, two or all three national bureaus. The basic report provides information on your debtors, past and present, and on what type of payment history you have. Residential Mortgage Credit Report (RMCR) A lender will usually require this report if you are buying a home, and as such, applying for a large loan amount. The lender will pull reports from at least two, and usually all three bureaus. In addition, your current employment may be verified and public records searched for bankruptcies or liens. Lenders are primarily looking for three things when they pull your credit file. The first thing lenders want to know is whether or not you are someone who acts responsibly, takes their debts seriously and pays their bills on time.
Secondly, a lender will look at your capacity to pay your bills on time. This is based upon your income, or the joint income of you and your spouse, and how that corresponds to your total debt. Finally, a lender will take a look at the possessions you currently have, or your collateral. You might have a car, valued at $10,000, which is already paid off. The fact that you were able to pay off this loan demonstrates that you had the ability to eliminate this debt and it further provides the lender with a possession that can be used as security against repaying the new loan.
Back to topAn A-6 loan is a cash-out refinance of your homestead property in Texas. A-6 loans require a 12-day recession period and the normal 3-day right of recession period for all refinance loans. The 12-day period counts business days only, and does not begin until the Notice Concerning Extensions of Credit form has been signed by all borrowers. Loans must also close at qualified approved Title companies only, no fee offices (i.e. private attorneys) are acceptable.
Back to topThe interest rate on an ARM is tied to a market index and is fixed for a specific period of time. Once that period of time is over, the interest rate is adjusted periodically (every 6 to 12 months) following the changes in the interest rate of index that is associated with the loan. Examples of market indexes include, but are not limited to, LIBOR, Constant Maturity Treasury, and 11th District Cost of Funds. Generally speaking an ARM enables borrowers to secure a loan at an initially lower interest than a fixed-rate loan. This means a borrower has lower monthly payments for a specific period of time when compared to other loan options. Lower monthly payments may allow you to qualify for a higher loan amount.
Back to topWe offer several loan programs that do not require PMI; please call us and one of our loan officers will be happy to assist you in finding the right program.
Back to top1. Find a builder/contractor that you are comfortable using and
that fits your needs. We have a list of custom homebuilders that
we can recommend to you.
2. Ask the builder for the addresses of the last 5 houses that they have built,
this way you can see some examples of their work. If they can not or will not
do this, we suggest you find a different builder.
3. Once you have reached an agreement with the builder, you should begin
searching for your permanent lender. At HC Mortgage Lending, we can help
you find permanent financing for your loan.
4. Appraise your home and land; then we will submit your complete package
to the interim lender and meet with them usually one time. After that,
we will schedule closing with a closing attorney of your choosing.
Many people enter the housing market without first pre-qualifying for a home loan. They spend countless hours looking at properties, only to find that a lender will not approve them for a loan on a property they want to buy. You can avoid this frustration by getting pre-qualified or pre-approved for a loan before you begin looking at houses. This is the only strategy I recommend to home buyers. Your real estate agent can help you determine how much you can afford. You also need to meet with a mortgage broker and get pre-approved for a loan. With pre-approval, the mortgage broker lets you know how much money they will lend to you. In addition, they also agree to lend you the money once you find a house. Then, when you find a house you like, you can present your letter of approval with the sales contract. This lets the seller know that you will be able to afford the home. It can sometimes also help you negotiate a better price.
Experienced professional real estate agents almost always insist on scheduling personal meetings with buyers before beginning a house search. There are several reasons for this. First, it allows the agent to establish a relationship and rapport with clients. Second, it lets the agent get to know you personally, which can help them better understand your wants and needs. And finally, it allows you to get to know the agent, which allows you to decide if you want to work with them or not.
Inexperienced and unprofessional real estate agents, on the other hand, often claim they can help you over the phone. Dealing with a real estate agent over the phone can lead to one of three problems. First, the agent may only try to sell you a property that you called about without first understanding your needs. Second, they may gather the information they need to search for a home for you, yet never follow up. And lastly, they may recommend properties that don’t meet your criteria.
To avoid these problems, always meet with your agent before starting your search for the perfect home. If after the meeting you decide to work together, the agent will most likely ask you to enter into an exclusive buyer agency agreement.
Good real estate agents work for you. They don’t try to sell you a home that doesn’t meet your needs. Instead, they provide the professional expertise you need to successfully navigate the sometimes complex home-buying process. This includes educating you on proper home-buying procedures, listening to your needs and wants, answering your questions and providing unbiased advice, and above all, always providing truthful information.
A good real estate agent will meet with you before you begin to look at properties. During this initial consultation, the agent will gather the information he or she needs to find the right home for you. This includes asking questions about your lifestyle, family, leisure activities, priorities, your home-buying experience, your likes and dislikes, and much more. A good real estate agent will also help you get pre-approved for a loan before searching for homes.
Once the agent gathers the necessary information and you enter into a buyer’s agency agreement, the agent will take you around to different neighborhoods. This helps you and the agent better pinpoint just the right properties to look at. Only then will the agent begin showing you individual properties.
Good real estate agents know the housing market and housing prices. They also work with the experts and specialists that are necessary to take care of the many facets involved with buying a home, from signing the purchase agreement to the closing process. A good agent will also be responsive to your phone calls, provide timely answers to your questions and will work to keep you fully inform It’s not uncommon for good real estate agents to remain in contact with their clients even after a property has been purchased. Your agent can be a great source of information on service providers and businesses to help you make your new house your home.
For some items it’s OK, even recommended, that you take time to think it over before making a purchase. This is not true when buying the right home, however. Why? In most cases, homes are one-of-a-kind items. Your chances of finding another home that offers the same combination of style, location, pricing, terms, availability and other criteria are very slim. That means that when you find a home you like that fits your wants, needs and budget, you need to act quickly and decisively. It is not uncommon for a real estate agent to suggest that you immediately submit a purchase agreement if you find the right house. If you like the house, chances are someone else does, too. In fact, it’s not uncommon for sellers to accept more than one contract for a property. This is especially true if the property is in a popular neighborhood or is attractively priced. If you have concerns about the property, insert any necessary clauses into the purchase agreement. But act quickly! You may never find another home like it again.
Make your first offer your best offer. Don’t submit a low first offer (an offer that is less than the asking price) and expect to haggle over the price with the seller. This approach may work when buying a car, but it can work against you when buying a house. When buying a car, if you don’t get the one you want at one dealership, chances are you can find another identical car at another dealer. Houses are different. As mentioned earlier, each house, with its combination of location, style, and price, is unique.
A low offer may offend a seller and they may not present a counter offer at all, which prevents you from offering a better price. If they are willing to counter offer, you will then find yourself in a game of offer – counter offer, which can be time consuming and stressful. And while you are playing this game, the seller may get and accept a contract from another buyer that is equal to or better than yours. Remember, the seller does not have to sell to you. They can choose whom to sell the house to.
I advise my clients to make the first offer their best offer. You may even consider offering more than the asking price. In some cases, such as with a new listing or when other people are looking at the same house, this may be the best strategy to get a home that you really want. Unless you are buying the home with cash, your lender will require that the home be inspected by an appraiser. The appraisal will let you and your lender know what the property is worth and will keep you from paying too much for a home.
To further protect your interests, be sure to work with only one real estate agent under an exclusive buyer’s agent agreement. Your agent can provide you with important information on the property, the market and the seller’s motivation. Your agent can also let you know if the circumstances surrounding a particular property would allow you to make a low offer.
Buying a house is a big investment, so it’s important to have any property you are considering to purchase thoroughly inspected before you commit to buying it. The only time a home inspection may not be necessary is if you are buying a new house that comes with a warranty that covers any construction defects. Otherwise, have the house inspected by a professional.
A good home inspection will uncover any problems that the house might have, such as structural damage, a leaky roof or bad plumbing. This is a crucial step in the home-buying process and can save you heartache and frustration down the road. Unless you are a building contractor or have considerable experience with house design and construction, it’s advised that you hire a professional home inspector. A professional home inspector will find any potential problems a house might have and will give you an unbiased report of anything he or she finds.
To protect your interests, be sure to include a home inspection contingency in the purchase agreement. This contingency will give you time to have the home properly inspected. If the inspection is not satisfactory, you have the right to cancel the purchase agreement and to receive a full refund of your deposit. This is a common practice that not only protects your interests; it also takes the home off of the market while you have it inspected. Your real estate agent can offer you advice and guidance to ensure your interests are protected. Your agent can also recommend a professional home inspector.
Just about anything you buy today, whether it’s a new car or a new appliance, comes with some sort of a warranty. The same is true for new homes, as most builders offer warranties on newly constructed houses. You can get warranties for resale homes as well. These warranties offer buyers an added level of protection in the event that something in the home, such as the furnace, hot water heater or stove, stops working for a predetermined time after the purchase. Whether a warranty is necessary or appropriate depends on the age and condition of the home’s components.
Sellers will sometimes offer a warranty, which they pay for, when they put the home on the market. In other cases, you can request that the seller offer a warranty when you write a purchase agreement. If the seller refuses, you have the option of purchasing a warranty yourself. Your real estate agent can provide you with information on home warranties.
Most people would prefer to put down the smallest deposit possible on a home they are interested in buying. From they buyer’s perspective, this keeps them from tying up a lot of money and, if they change their minds on the property, a small deposit minimizes their risk. This strategy, however, can actually work against you.
From the seller’s perspective, a small deposit can signal that you are not very serious about the property because you’ll have little to lose if you back out of the contract. To protect their interests, the seller may counter offer your contract and demand a larger deposit. A small deposit might also put you out of the running for the property is the seller receives multiple contracts that offer larger deposits. And, the seller might also reject your offer outright.
If you find a home you want, put down a large deposit. A large deposit shows that you are serious and, at least in the mind of the seller, minimizes the chances that you will back out of the contract later. Your real estate agent can provide you with guidance about the amount of a deposit you should offer based on the price range of the property.
The best time to buy a house is now! Unfortunately, people put off buying homes for a number of reasons. It’s understandable, because purchasing a house is a big decision. However, people who wait and stay out of the market tend to lose in the long run. Here are some of the reasons why waiting to buy can work against you.
Many people wait to buy a house because they want to put more money aside in the bank, thinking this will save them money. This strategy rarely works. While they put away money into their savings accounts, the prices of homes are rising by thousands of dollars. It’s not uncommon for housing prices to rise by two-to-five times the rate of their savings. The result? They end up paying much more for a house.
Another common strategy is to wait for interest rates to come down. So these people wait, looking for the best financing deal. Yet while they wait, the prices of houses continue to climb. In the end, this strategy often leads to higher monthly payments because the increased cost of the house more than offsets the lower interest rate. Other people put off buying until they can afford their dream home. My advice to these people is to buy something, anything, now and use the property as a stepping stone to their dream house. Most people work their way through three to six properties before they reach the house of their dreams. If you want to live in a dream home, buy something now and start to build equity. Then, use the potential appreciation of the property to work for you. For most people, this is the fastest and sometimes the only way to eventually purchase the house of their dreams.
Perhaps the greatest reason people put off buying is fear. They’re afraid they’ll make the wrong decision or buy something they can’t afford. A good real estate agent will help you find the right property, a property you can afford, and can help prevent you from making a bad decision. Most people feel some fear when they buy a house, but they move ahead with the purchase anyway. The only wrong decision is to not get into the housing market today. Chances are that in a few years you’ll regret not getting into the market sooner and possibly not moving up into another house sooner.
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