Money Matters

The Mortgage Process

Preparation Is Key

As your Realtor partners, the Sold By Sisler Team will walk through this process ensuring you are completely satisfied with the process. This article is helpful if you are buying your first home or maybe your fifth. We recommend you keep this in mind, a little preparation will enhance your mortgage processing experience and we will help you through every step in the process. Remember, our goal is to make every family we serve feel at home.

If you are a salaried employee, please be prepared to provide 2 years of W-2's and one month of pay stubs. If you are self-employed, be prepared to provide two years tax returns with schedules, year-to-date profit & loss statement along with a balance sheet. First-time homebuyers will need to provide rental agreements and two years tax returns with schedules.

What You Will Need For Loan Approval?

To help speed up the approval and mortgage process, please also provide a bank statement for one month for each bank, stock and mutual fund account along with a pay stub, and last year’s tax returns. If applicable, also have a copy of a divorce decree/separation agreement. If you are not an US citizen, lenders will require you provide them with a copy of your green card (front & back). If you are not a permanent resident, please provide your H-1 or L-1 visa.

Getting Qualified

We always recommend buyers get qualified before you apply for a loan. It will help you determine how much you can borrow. When buying a house, with many lenders you may get pre-qualified right over the phone or on the Internet in a few minutes. We highly recommend you secure loan pre-approval before you start looking for a house. By securing a pre-approval it will help you:

  • Determine the maximum house you can buy, so you don't waste time looking for properties you can’t afford.
  • Places you in a stronger position when negotiating with the seller, because the seller knows that your loan is already approved.
  • Helps you close quicker, since your loan is already approved.
  • Select A Loan Program and Rate Based On Your Needs

Along with the lender, we will help you to determine which type of mortgage best fits your financial situation. It is important to consider the following:

Consider how long you plan to live in your new home and how long you will keep the loan. If you plan to sell the house in a few years, you may want to consider an adjustable or balloon loan. On the other hand, if you plan to keep the house for a longer period of time, you may want to look at fixed loans.

We will help you understand the relationship between rates and points. Points are considered to be prepaid interest and are tax deductible. Each point is equal to one percent of the loan. For example 1 point on a $150,000 loan is $1,500. The more points you pay, the lower the rate you will receive.

Shop & Compare

Compare different programs. Shopping for a loan can be difficult. With so many programs to choose from, each of which has different rates, points and fees, it's hard to figure out which program is best for you. That's where an experienced loan officer can help you make a decision that's best for you.

Obtain Loan Approval

Once your loan application has been received, your lender will start the loan approval process immediately. This involves verifying your:

  • Credit history
  • Employment history
  • Assets including your bank account, stocks, mutual fund and retirement accounts
  • Property value

Based on your specific situation, additional documents or verifications may be required. To improve your chances of getting a loan approval:

  • Thoroughly complete the loan application
  • Respond promptly to any requests for additional documents. (This is especially critical if your rate is locked or if you plan to close by a certain date.)
  • Refrain from making any major purchases. Don’t buy a car, furniture or another house till your loan has closed. Anything that causes your debts to increase will have an adverse affect on your current application.
  • Maintain your current bank balances and refrain from moving money into your bank accounts unless it can be traced. If you receive money from friends, family or other relatives, please contact your lender immediately.

Close The Loan

After your loan is approved and your closing is scheduled (based on a predetermined date on your Sales Contract), you will be required to sign the final loan documents. This will normally take place in front of a notary public.

During the closing, be prepared to:

  • Provide a certified check for your down payment and/or closing costs if required.
  • Review the final loan documents. Make sure that the interest rate and loan terms are what your were promised. Also, verify that the name and address on the loan documents are accurate.
  • Sign all loan documents. Your loan will normally close shortly after you have signed the loan documents.

Ready To Find Your Family’s Next Home?

We understand you might be just starting the homebuying process. Please know we will always respect your right to privacy. When you’re ready to start looking for your new home, click here or give us a call at (301) 509-1550. We’re here to help you find the ideal home for your family in the greater Maryland, Northern Virginia or D.C. areas.

Don’t forget to review the rest of the information-rich articles located in the Money Matters section for all kinds of help with investing in real estate or financing your next home.

Questions? Just Ask!

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