Buying a home is usually a very fun and exciting time in people's lives. However, one of the least favorite parts of buying a home is going through the mortgage loan process. If you are prepared and have the needed information for your lender, the process can be a piece of cake. Before a buyer begins to even start looking at homes, he/she should get prequalified. It's generally a very simple process in which a lender would ask a few questions(take a loan application) in order to determine how much money a home buyer qualifies for. This can be done in person, over the phone or by filling out a loan application which takes about 15 minutes. It's always best to do this first so that you won't waste your time looking at properties that are out of your price range. Once the home buyer has found the home they want to purchase, the lender will write a prequalification letter showing that he/she is qualified. A seller usually wants this information before negotiations take place.
Once the property is under contract the lender will process your loan application in order to get you approved as quickly as possible. Basically the lender verifies all the information the buyer has previously provided during the loan application process to be sure that it was accurate. The information required by your lender usually consists of your most recent 30 days paystubs, your most recent 2 years tax returns, 1099’s and W-2 forms, and your most recent 2 months asset statements that you have received from your financial institutions. Asset statements include checking, savings, retirement and investment accounts. Also, an important note regarding deposits that may show up in your asset accounts that are not payroll related, lenders are typically required to source or document any deposits that collectively total over 25% of your gross monthly income. This can often be a little frustrating so if you are prepared, you can eliminate some of this potential frustration.
The appraisal is next. The lender has an appraiser inspect the property and the surrounding comps to make sure that the property is worth what the buyers have agreed to purchase the property for. You will be provided with a copy of the appraisal report and this is generally a good time to start shopping for your insurance as well. Once the appraisal is received and your complete file has been reviewed by an underwriter, they will issue their final decision. If the final decision results in full loan approval, your file will then go to closing where docs will be sent to your closing agent so that they can prepare a final settlement statement, also called a HUD1 statement. The HUD1 statement will have all of your final loan figures including funds needed for closing, interest rate and total monthly payment. When looking for a lender it's highly recommended that you use a local lender. If you are looking to purchase property in Wilmington NC and surrounding area I always recommend Troy Williamson with TowneBank Mortgage. He makes the loan process as easy as possible. I have had heard nothing but good things about his strong work ethic and getting things done on time.
Troy Williamson: Cell: 910-262-2613 Office: 910-679-8222
Written by: BlueCoast agent Jeff Humphrey 910.443.7558