M O R T G A G E H A N D B O 0 K

Transcription

1 MORTGAGEHANDBO0K

2 At Network Funding we aim to make The Loan Process USING THIS HANDBOOK as simple as possible for you, which is why we ve created this Mortgage Handbook. As you apply with one of our Morgage Experts, be sure to review the helpful tips and checklists included. W H A T S INSIDE 10 THINGS WE NEED TO KNOW Information to know when starting The Loan Process YOUR GOALS A guide to determine what s most important before starting The Loan Process DO & DON T Important tips to keep in mind throughout The Loan Process ITEMS NEEDED A master list of documents needed for The Loan Process THE LOAN PROCESS A simple diagram illustrating the steps in The Loan Process

3 M A K IN G IT E A SIER WHEN APPLYING FOR A LOAN AND STARTING THE LOAN PROCESS, YOU WILL BE ASKED FOR THE FOLLOWING INFORMATION: ID EN TIT Y 1. LEGAL NAME 2. SOCIAL SECURITY NUMBER 3. DATE OF BIRTH 4. ADDRESS (LAST 2 YEARS) IN CO ME 5. EMPLOYER 6. INCOME SPECIFICS 7. WORK HISTORY A SSETS 8. BANK ACCOUNTS 9. INVESTMENTS 10. OTHER REAL ESTATE OWNED 10 THINGS TO K N O W

4 T HINK T HR O U GH YO UR G O A LS D O W N PAY MEN T HOW MUCH MONEY DO YOU WANT TO USE AS YOUR DOWN PAYMENT? Nearly every loan program requires that you put some money down as your initial equity in your home. Think through what the ideal amount is for you. Keep in mind that you should maintain a healthy amount of reserves in your account(s) for after closing, at least several months worth of expenses is recommended. OUR RECOMMENDATION Invest the largest amount that s right for you. If possible, investing at least 20% of the value of your home is ideal because it keeps you from having to pay mortgage insurance (PMI). Keep in mind that you never want to be house rich and cash poor. If 20% isn t right for you, there are other loan programs that require a far less down payment. For example, 3.5% for FHA, 5% for Conventional and 0% for VA or USDA loans are available to qualified borrowers. For more information visit the Loan Options page on our website or talk with your Loan Officer. WHEN APPLYING FOR YOUR FIRST LOAN, IT S EASY TO FEEL OVERWHELMED AND UNSURE OF WHERE TO START. BEFORE YOU BEGIN THE LOAN PROCESS, IT S HELPFUL TO THINK THROUGH YOUR GOALS. M O N T HLY PAY MEN T WHAT IS THE MAXIMUM YOU WANT TO SPEND ON YOUR HOUSING EXPENSES EACH MONTH? In addition to your mortgage payment, you will also be responsible for property taxes and homeowner s insurance. Homeowner s association fees and mortgage insurance (PMI) can also apply in certain situations. Preferably, you want the total of your housing expenses to be less than 1/3 of your gross monthly income. OUR RECOMMENDATION

5 T IMIN G WHEN DO YOU IDEALLY WANT TO PURCHASE YOUR PROPERTY? OUR RECOMMENDATION Don t rush into buying a home. Make sure you are ready for it from both a financial perspective as well as a life-stage perspective. Buying a home can be stressful. Consider whether other naturally stressful events are about to happen and whether now is the best time for you to buy a home. S A LE S P R I CE DO YOU HAVE AN IDEAL PRICE R ANGE IN MIND? OUR RECOMMENDATION Consider your down payment goal. The sales price needs to be proportionate to the down payment. To calculate the sales price that you can consider, divide the down payment amount by the percentage of the home s value you want it to equal. (For example, if you wanted to put $10,000 down and you need it to equal 5% of the home s value you would use the following calculation: $10,000/0.05 = $200,000 sales price.) LIFE O F LO A N HOW LONG DO YOU PL AN TO BE IN THIS HOME? Consider how long you think you ll be in the home and when you d want to have the mortgage paid off. The life of your mortgage can vary from 10 to 30 years. The longer your mortgage is, generally the lower your payments will be. However, most shorter loans have lower interest rates, which can be advantageous for building equity. OUR RECOMMENDATION The monthly payment will vary based on the lifetime of the loan. Once you have a sales price and loan amount established, pick the shortest loan term with a monthly payment that works for you. Lastly, make sure to let your Loan Officer know if you plan on paying your mortgage off sooner than scheduled. Y O U R G O A L S

6 WHAT TO DO AND NOT TO DO THE DO LIST DO read this list! DO keep making all of your payments, in full and on time! AT NETWORK FUNDING WE TAKE TWO THINGS VERY SERIOUSLY: PRE-QUALIFICATIONS AND CLOSING DATES. WHEN WE SAY THAT YOU RE PRE-QUALIFIED FOR A CERTAIN AMOUNT IT IS BASED ON SEVERAL THINGS. IF YOUR ASSETS, INCOME OR CURRENT DEBT OBLIGATIONS CHANGE DURING THE COURSE OF THE LOAN PROCESS IT COULD JEOPARDIZE YOUR ABILITY TO SECURE FINANCING. PLEASE REVIEW THIS HELPFUL LIST OF DO S AND DON TS TO AVOID MAKING A MISTAKE. DO keep using your current credit cards and other existing credit as you normally would, unless otherwise instructed by your Loan Officer. DO comply with all requests for documentation as quickly as possible. Certain items may need to be updated as the process goes on. We will try to minimize our requests for additional documentation. DO comply with requests for clear and complete documentation. Unclear copies and missing pages are not considered acceptable for loan files. DO let us know if you plan to receive gift funds for closing costs or down payment. DO inform us if you have upcoming expenses that are not reflected on your credit report. DO inform us of any upcoming job, income or significant life changes. DO notify us if you plan to travel at any point during the loan process or immediately following the scheduled closing date.

7 THE DON T LIST DON T open or apply for any new lines of credit, including (but not limited to): vehicles, appliances, furniture or credit cards. DON T drastically increase any of your existing debt or credit obligations. DON T co-sign for anyone on anything. DON T dispute anything on your credit report. If something is inaccurate, let your Loan Officer know. DON T payoff any debt, collections or credit unless it is due or your Loan Officer advises you to do so. DON T change your job, industry or compensation without informing your Loan Officer. DO AND D O N T DON T cancel or close any assets, accounts or liabilities. DON T make cash deposits into your bank account or move funds without first discussing it with your Loan Officer. DON T be surprised by requests for additional documentation. We do our best to minimize our requests for you but certain requests are unknown and unanticipated until after your documentation is reviewed.

8 DOCUMENTS TO GATHER THE GATHER LIST 1. Current driver s license or photo ID (for all borrowers) 2. Previous 2 years W-2 s and 1099 s for all jobs worked during that time 3. Previous 2 years tax returns (all schedules and pages, including K1 s if applicable) 4. Paycheck stubs for borrower and co-borrower covering 1 full month (most recent) 5. Last 2 months of statements for checking and savings accounts (or any account that will be used in conjunction with the transaction) ONCE YOU VE STARTED THE LOAN PROCESS BY APPLYING WITH ONE OF OUR LOAN OFFICERS, REFER TO THIS LIST TO KNOW WHICH DOCUMENTS WE WILL NEED IN ORDER TO COMPLETE YOUR APPLICATION. Please furnish all pages of every statement, even blank pages Provide explanations and copies of checks for all sizeable non-payroll deposits 6. Sales Contract (signed by all parties) 7. Earnest Money Check (if applicable) 8. Homeowner s insurance agent s name and contact information

9 9. If currently renting, please provide landlord contact information for prior 24 months 10. Most recent mortgage statement, property tax and homeowner s insurance documentation for any additional properties owned, as well as any current lease agreements 11. Divorce Decree, Child Support and Separation Agreement (if applicable) SELF-EMPLOYED BORROWERS IF YOU OWN >25% OF A COMPANY 12. Previous 2 years personal and corporate tax returns (all schedules and pages) 13. Current Year-to-Date Profit & Loss Statement FOR REFINANCES 14. Copy of HUD-1 Settlement Statement 15. Current mortgage statement for subject property I T E M S NEEDED 16. Current homeowner s insurance and property tax statements 17. Survey for subject property

10 LE A R N T HE PR O CESS LO A N PR O CESS DI A GR A M ORIGINATION PROCESSING 1. APPLY THE LOAN PROCESS Apply with a Loan Officer to get pre-qualified DIAGRAM ON THE RIGHT ILLUSTRATES THE ORDER IN WHICH YOUR LOAN 2. ISSUE WILL PROGRESS, We issue the pre-qualification SHOWING YOU WHICH 5. ORDER We order the third party services, such as the appraisal DEPARTMENT OVERSEES THE VARIOUS STAGES AND WHO IS RESPONSIBLE FOR EACH TASK. 3. GATHER Gather your documents to complete your application CONNECT WITH ONE OF OUR LOAN OFFICERS ONLINE OR OVER THE PHONE TO TAKE THE FIRST STEP AND BEGIN THE LOAN PROCESS TODAY! 4. FIND Find a property and get it under contract 6. PROCESS We process the file to prepare it for underwriting

11 UNDERWRITING CLOSING 7. UNDERWRITE 9. CLEAR We underwrite to formally approve or deny the loan We clear the file for closing 8. SATISFY 10. CLOSE Satisfy any conditions assigned by the underwriter Close on your new home! THE LOAN PR O CESS

12 NMLS # Swenson Dr. Waukesha, WI LICENSED BY THE DEPARTMENT OF BUSINESS OVERSIGHT UNDER THE CALIFORNIA RESIDENTIAL MORTGAGE LENDING ACT