Financing a Home in the United States

Transcription

1 Financing a Home in the United States PHH Home Loans relocation service guides you through the United States home financing process and we will work with you and your company s relocation department to ensure a fast and smooth process. When buying a home in the United States, it is important to keep all of your financial documents readily available in the months prior to your move. Your relocation mortgage consultant will let you know which documents you will need. Please provide any requested information immediately. Translation of foreign documents may be required. This general guide will help you get started. Process and Timeline Overview 1. Meet with PHH Home Loans Relocation Specialist to discuss loan options, determine program options and eligibility, and discuss documentation requirements 2. Complete loan application and obtain credit report. Choose loan program, set interest rate and request/review documentation 3. Loan processing. Gather client documents, verify information, order and review appraisal and title work 4. Final loan approval, settlement document preparation and settlement Average Time Frame 1 2 business days 1 2 business days business days 7 10 business days Overview of Documentation you may be asked to provide Document Translation and Conversion Documentation. All non English documents will need to be translated to English. If you do not have access to a translator, please inform your loan coordinator and they will assist you in your search. Income Earnings Statements. You may be asked to provide your most recent consecutive earning statements covering the past 30 days (5 if paid weekly, 2 if paid every 2 weeks, and 1 if paid monthly). If you are currently paid in a currency other than U.S. dollars (USD), we will need written and signed verification of the USD rate of pay for your new employment in the U.S. Year End Earnings Statements. You may be asked to provide your past two years W 2 statements or the foreign equivalent of a government issued wage and tax statement (Note: If you are using non guaranteed bonus income to qualify for your home loan, a two year history of bonus income must be validated. If you are guaranteed a bonus, a signed offer letter is needed to validating the terms of the bonus.)

2 Federal tax returns. You may be asked to provide the past two years federal tax returns, including all schedules for domestic U.S If your tax return was done outside of U.S. during either of the previous two years, the foreign equivalent should be provided. Employment Self Employed You may be asked to provide business Website address and a reference letter from a CPA. Employment explanation. Written explanations will be requested if you have been employed less than two years or if there are any gaps in your employment history during the past two years. Relocation Documentation Please provide a copy of your signed offer letter for the U.S. position and any documents pertaining to your relocation benefits. Assets Statements. You may be asked to provide asset statements for the past days. The statements will be reviewed to determine sufficient down payment and post closing reserves. Asset accounts may include savings, checking, CDs, money markets, annuities, pensions, 401ks, stock/bond brokerage accounts, and all foreign financial accounts. (All statement pages for each account will be required. (i.e. If page one states Page 1 of 4, all four pages will need to be provided.) Down payment funds. Funds being used for down payment will be verified. Assets can be held in either a U.S. or foreign financial institution. Source of deposits. You will need to document the source of any large deposits or transfers into your accounts. A large deposit could be considered any deposit greater than 50% of your verified income or a group of deposits that exceed that amount. Proof of funds received. If investment funds will be liquidated to cover the down payment and/or closing costs, please be prepared to provide withdrawal terms and proof of funds received. Residence(s) Proof of sale. If you are in the process of selling a property or have recently sold a property, you may be asked to provide a copy of the signed contract and/or proof of settlement to validate that the home sold and the monies have been received. Retained properties. If you are retaining any properties, you may be asked to provide any mortgage, insurance and/or tax statements. You must qualify for the loan with payments on the new U.S. property as well as any foreign properties that are retained. Rental agreements. If properties are rented, additional items may be required to validate income received and terms of agreement. Visa/green card, Social Security Number, Tax ID Number Visa/Green Card or any other current INS document. Please keep these documents available. PHH Home Loans will need to inspect and make copies.

3 Social Security number or TIN. A U.S. Social Security number will be required for each borrower. For information on how to obtain a Social Security number please visit In some instances, a Tax ID Number (TIN) may be allowed in lieu of a U.S. Social Security Number. For information on how to obtain a Tax ID Number, please visit gov.us Credit references Payment history. Up to four credit references, documenting a 12 month payment history, may be required. Possible references include housing (mortgage or rent), installment loan payments, revolving credit, and utility bills. Written references need to be originals and on letterhead. Billing statements. Please keep all your billing statements in the months preceding your move as they may be helpful in the loan process. Additional requests for documentation Additional requests for documentation may be made as you move through the approval process. The primary reasons for these requests include, but are not limited to, the following items. Missing information Mismatched information Old documentation (Typically, documents must be within 90 days of closing) New discoveries Change in loan program For assistance, please contact your relocation mortgage specialist by calling (888) or visiting

4 Glossary of Mortgage Terms Adjustable Rate Mortgage (ARM) A mortgage in which the interest rate is adjusted periodically, based on the movement of a financial index. If you apply for an adjustable rate mortgage, the lender is required to provide you with an ARM Program Disclosure which spells out the terms of the loan. Appraisal A report made by a qualified, licensed appraiser to determine the market value of a property. The determination of property market value is based on recent sales information of similar properties. Certified Bank Check A check guaranteed by a bank to be covered by sufficient funds on deposit. Typically, funds to cover settlement costs are in the form of a bank check Credit Report A report containing all the borrower s past and current credit activity that resides in the three main credit repository databases Discount Point Fees that are collected by the lender in exchange for a lower interest rate. Commonly called points, each point is equal to 1% of the loan amount Earnest Money The deposit money given to seller or seller s real estate agent, by the potential buyer, at the time of the purchase offer. If the offer is accepted, the money will become part of the down payment. Fixed Rate Mortgage A mortgage with an interest rate and monthly payments that remains constant over the life of the loan. The most common terms are 30 year and 15 year. Good Faith Estimate A written estimate of the closing costs the borrower will pay at closing. Under the Real Estate Settlement Procedures Act (RESPA), the lender is required to provide this disclosure to the borrower within three days of receiving a loan application. HUD 1 (Settlement Statement) The Settlement Statement, often referred to as the HUD 1 form, is used to itemize buyer, seller, broker, and lender charges and credits at the time of settlement (closing). Income Qualifying Ratios Guidelines used by lenders to determine how much of a loan a home buyer qualifies for. Often referred to as debt to income ratios (or DTI). Interest Rate Agreement (Rate Lock) A written agreement between the borrower and the lender which guarantees a specific interest rate. A borrower will take this action sometime between the application and the closing date. International Credit Credit verified in country of origin. Often referred to as non traditional credit and includes items not typically reported to credit bureaus (utility bills, landlord references, private party loans, etc ) Loan Commitment A written agreement between a lender and a borrower to lend money and is often subject to certain conditions. Loan Originator The loan originator completes the application and pre approval process with the borrower, helps the borrower find the loan program that best meets their needs, and follows up with the borrower throughout the loan approval process. Loan Processor The loan processor prepares the loan for underwriting and follows up with the borrower throughout the loan approval process. Loan To Value The relationship between the amount of the mortgage and the lower of the sales price or property value, usually shown as a percentage. Mortgagee The lender in a mortgage contract Mortgagor The borrower in a mortgage contract. PITI An acronym for payments to lender that cover principal, interest, taxes and insurance on a property. Power of Attorney (POA) A written document authorizing a person to act on the behalf of another person. That person does not have to be an attorney Private Mortgage Insurance (PMI) Insurance written by a private mortgage insurance company to protect the lender against losses caused by mortgage default. This is commonly required on loan transactions involving less than a 20% down payment or equity position. Purchase Agreement (Purchase Contract) A written proposal to buy a piece of real estate that becomes binding when accepted by the seller. Also called a sales contract. Realtor A real estate broker or sales associate affiliated with the National Association of Realtors. Title Ownership of a property. A clear title is one without any outstanding liens or encumbrances. A cloud on title refers to any outstanding liens or encumbrances which could impair the title. Title Insurance Policy A policy designed to protect the buyer and/or lender after closing from financial losses arising from any defects in the title that may have occurred prior to purchase. Underwriting The process of evaluating a loan application to determine the risk involved for the lender.

5 AUTHORIZATION TO OBTAIN AND VERIFY BORROWER INFORMATION Borrower Borrower Property Loan Number: Authorization to Release Information To Whom It May Concern: 1. I/We have a pplied for a mortgage loan from PHH Hom e Loans, LLC (lender). As part of th e application process, PHH Home Loans, LLC (lender) and the mortgage guaranty insurer (if any), may verify information contained in my/our loan application and in other docum ents required in connection with the loan, either before the loan is closed or as part of its quality control program. 2. I/We authorize you to provide to PHH Home Loans, LLC (Lender), any investor to whom PHH Home Loans, LLC (lender) m ay sell my mortgage, the mortgage guaranty insurer (if any), and any quality control review vend or any and all i nformation and docum entation that they request. Such in formation includes, but is not limited to, employment history and income; bank, money market, and similar account types; credit history; and copies of income tax returns. 3. PHH Home Loans, LL C (lender) o r any investor that purc hases the m ortgage, or t he mortgage guaranty insurer (if any), may address this authorization to any party named in the loan application. 4. A copy of this authorization may be accepted as an original. 5. Your prompt reply to PHH Home Loans, LLC (lender), the investor that purchased the m ortgage, or the mortgage insurer (if any), is appreciated. Borrower Signature Date Borrower Signature Date

6 Credit Checklist To expedite the processing of your loan, PHH Home Loans will need to obtain an international credit report, which provides information about your credit history. This report requires a non-traditional type of documentation such as utility bills, rental or lease payments and credit cards held in your country of residence. Please provide information on the following accounts that you have held for at least months even if there is a zero balance at this time. Gas: Electric: Water: Phone: Automobile: Mortgage/Landlord:: Credit Card: Credit Card: