The Loan Process
The very first thing you should do in the loan process is to get pre- qualified or pre-approved. You can typically get pre-qualified over the phone. A pre-qualification is not as beneficial as a pre-approval where you have to go through a more rigorous process which includes verification of your credit, income, assets and liabilities. It is highly recommended that you get pre-approved before you start looking for a house. This will help you:
- Find out the maximum house you can purchase.
- Puts you in a stronger position because when you find a home that you may want to purchase you don’t have to wait to make an offer on the home.
- Helps you close quickly, since your loan is already approved.
Some required loan documents that maybe needed
- W-2 forms and pay stubs.
- If you rent you may need your landlords name and phone for the past two (2) years.
- Two (2) months banks statements for each bank and the most recent copies of any stock brokerage or IRA/401K accounts that you may have.
Once the loan application has been received the loan approval process starts.
Based on your specific situation, additional documents of verifications may be required. To improve your chances of getting a loan approval:
- Do fill out the loan application completely. Trying to hide things, could delay your process.
- Do respond promptly to any requests for additional documents. This is especially critical if you rate is locked or if you plan to close by a certain date.
- Do keep originals of all pay stubs, bank statements and other important financial documents These types of documents are only good for 30 days in most cases.
- Do Not do anything that is going to change how you originally applied for your loan. Additional debt after the loan process is started could change your loan approval.
- Do Not make any major purchases during or prior to closing (example a new car, appliances).
- Do Not move money in and out of bank accounts.
- Do Not go out of town around the closing date.
Closing the Loan
After your loan is approved and all conditions cleared, you will be notified that you are clear to close and be required to sign the final loan documents. This will normally take place at the closing attorney’s office. Be prepared to:
- Bring a cashiers check for your down payment and closing costs if required. Personal checks are normally not accepted.
- Review the final loan documents. Make sure that the interest rate and loan terms are what you were promised. Also, verify that the name and address on the loan documents are accurate.