Learn Do’s and Don’ts during the home loan process

The Loan Process

We will walk you through the entire mortgage application process until your closing date of your home purchase and help lead you to the home of your dreams.

  • Pre-qualification
  • Mortgage Programs and Rates
  • The Application
  • The Loan Estimate
  • The Intent to Proceed
  • Processing
  • Required Documents
  • Credit Reports
  • Appraisal Basics
  • Underwriting
  • Closing Disclosure
  • Closing
  • Summation

The Mortgage Process

Pre-Qualification

Pre-qualification starts the loan process. Once Pacific Sunbelt has gathered information about your income and debts, a determination can be made as to how much you can pay for a home.

To approve homebuyers for the type and amount of mortgage they want, Pacific Sunbelt looks at key factors.

First, your ability to repay the loan and, second, your willingness to repay the loan.

It is important to remember that there are no rules carved in stone. Each applicant is handled on a case-by-case basis. So even if you come up a little short in one area, your stronger point could make up for the weak one.

The Mortgage Process

Mortgage Programs and Rates

With so many programs from which to choose, each with different rates, points and fees, shopping for a loan can be time consuming and seem complex.

Pacific Sunbelt’s experienced mortgage advisors can evaluate your situation and recommend the most suitable mortgage program, thus allowing you to make an informed decision.

Preparing to Apply

The Application

The application is the next step of the loan process. With the aid of a mortgage professional, the borrower completes the application and provides all Requested Documentation.

A loan application is not considered complete until you have given us at least the following information:

  • Your name
  • Your income
  • Your Social Security number (and authorization to check your credit)
  • The address of the home you plan to purchase or refinance
  • An estimate of the home’s value
  • The loan amount you want to borrow

Better mortgage rates

The Loan Estimate

A Loan Estimate is a three-page form that you receive after applying for a mortgage. The Loan Estimate tells you important details about the loan you have requested. We will deliver this to you within 3 days of your fully completed loan application. The form uses clear language and is designed to help you better understand the terms of the mortgage loan you’ve applied for. All lenders are required to use the same standard Loan Estimate form. This makes it easier for you to compare mortgage loans so that you can choose the one that is right for you. When you receive a Loan Estimate it does not mean that your loan has been approved or denied. The Loan Estimate shows you what loan terms we can offer you if you decide to move forward.

Better mortgage rates
Better mortgage rates

The Intent to Proceed

After you receive your Loan Estimate, it is up to you to decide whether to move forward with us or not. If you decide not to proceed with an application for a particular loan, you don’t need to do anything further. If you do intend to proceed with us, you must take the next step and tell us in writing or by phone that you want to move forward with the application for that loan. All lenders are required to honor the terms of the Loan Estimate for 10 business days. So if you decide to move forward more than 10 business days after you receive a Loan Estimate, please realize that market conditions may make it necessary to revise the terms and estimated costs and provide you with a revised Loan Estimate.

Better mortgage rates
Better mortgage rates

Processing

Once the application has been submitted, the processing of the mortgage begins. The Processor orders the Credit Report, Appraisal and Title Report. The information on the application, such as bank deposits and payment histories, are then verified. Any credit derogatories, such as late payments, collections and/or judgments require a written explanation. The processor examines the Appraisal and Title Report checking for property issues that may require further investigation. The entire mortgage package is then put together for submission to our underwriters.

Better mortgage rates
Better mortgage rates

Required Documents

This is a partial list of documentation your mortgage advisor will need; your mortgage advisor can tell you about any additional requirements.

Residential History

  • Your residential address for the past two years
  • Landlord names and addresses for the last two years, if you rented during that time

Employment & Income History

  • Paycheck stubs from the last 30 days showing your year-to-date earnings
  • W-2 or I-9 tax forms (issued by your employer) for the past two years

Personal Assets

  • Bank account statements from the two most recent months for all checking and savings accounts
  • Other asset statements from the past two months for any CDs, IRAs, stocks, bonds or other securities you intend to use for your down payment
  • Current real estate holdings, including property address, current market value, mortgage lender’s name and address, loan account number, balance and monthly payment

Personal Debt

  • A list of any new monthly debts not listed on your credit report (auto loans, student loans, mortgage loans, credit cards, etc.), including creditor name, address, account number, minimum monthly payment amount and outstanding balance on each account

Loan Application

Credit Reports

A Credit Profile refers to a consumer credit file, which is made up of various consumer credit reporting agencies. It is a picture of how you paid back the companies you have borrowed money from, or how you have met other financial obligations. There are five categories of information on a credit profile:

  • Identifying Information
  • Employment Information
  • Credit Information
  • Public Record Information
  • Inquiries

If you have had credit problems, be prepared to discuss them honestly with a mortgage professional who will assist you in writing your “Letter of Explanation.” Knowledgeable mortgage professionals know there can be legitimate reasons for credit problems, such as unemployment, illness, or other financial difficulties. If you had problems that have been corrected (reestablishment of credit), and your payments have been on time for a year or more, your credit may be considered satisfactory.

The following items are some of the ways that you can improve your credit score:

  • Pay your bills on time.
  • Keep Balances low on credit cards.
  • Limit your credit accounts to what you really need. Accounts that are no longer needed should be formally cancelled since zero balance accounts can still count against you.
  • Check that your credit report information is accurate.

Loan Application

Appraisal Basics

An appraisal of real estate is the valuation of the rights of ownership. The appraiser must define the rights to be appraised. The appraiser does not create value, the appraiser interprets the market to arrive at a value estimate. As the appraiser compiles data pertinent to a report, consideration must be given to the site and amenities as well as the physical condition of the property. Considerable research and collection of data must be completed prior to the appraiser arriving at a final opinion of value.

Loan Application

Underwriting

Once the processor has put together a complete package with all verifications and documentation, the file is sent to our underwriters. The underwriter is responsible for determining whether the package is deemed an acceptable loan. If more information is needed, the loan is put into “suspense” and the borrower is contacted to supply more information and/or documentation. If the loan is acceptable as submitted, the loan is put into an “approved” status.

Loan Application

Closing Disclosure

The Closing Disclosure is a five-page form that provides final details about the mortgage loan you have selected. It includes the loan terms, your projected monthly payments, and how much you will pay in fees and other costs to get your mortgage (closing costs).

We are required by law to give you the Closing Disclosure at least three business days before you close on your mortgage loan. This three-day window allows you time to compare your final terms and costs to those estimated in the Loan Estimate that you previously received from us. The three days also gives you time to ask us any questions before you go to the closing table.

Loan Application

Closing

Once the loan is approved, the file is transferred to the closing and funding department. The closing department notifies the broker and escrow officer of the approval and verifies broker and closing fees. The escrow officer then schedules a time for the borrower to sign the loan documentation.

At the closing the borrower should:

  • Bring a cashiers check for your down payment and closing costs if required. Personal checks are normally not accepted and if they are they will delay the closing until the check clears your bank.
  • Review the final loan documents. Make sure that the interest rate and loan terms are what you agreed upon. Also, verify that the names and address on the loan documents are accurate.
  • Sign the loan documents.
  • Bring identification and proof of insurance.

After the documents are signed, the escrow officer returns the documents to the lender who examines them and, if everything is in order, arranges for the funding of the loan. Once the loan has funded, the escrow officer arranges for the mortgage note and deed of trust to be recorded at the county recorders office.

Loan Application