Getting started: Organize your documents
When buying or refinancing a home…
1. If you are on salary: provide your past two years of W-2's and one full month of pay-stubs or if you are self-employed: provide two years of tax returns and a year-to-date profit and loss statement.
2. If you own rental property, please provide current rental agreements and your two most recent tax returns.
3. Provide three months of statements for each bank, stock, and mutual fund account.
4. Provide your most recent copies of any stock brokerage or IRA/401K accounts that you may have.
5. Provide a copy of your divorce degree (if applicable).
6. If you are not a U.S. citizen, provide a copy of your green card (front & back), and if you are not a permanent resident, please provide us with your H-1 or L-1 visa.
When applying for a home equity loan…
1. If you are on salary: provide your past two years of W-2's and one full month of pay-stubs or if you are self-employed: provide two years of tax returns and a year-to-date profit and loss statement.
2. If you own rental property, please provide rental agreements and two years of tax returns.
3. Provide a copy of the note on your first mortgage.
4. Provide a copy of divorce degree (if applicable).
5. If you are not a U.S. citizen, provide a copy of your green card (front & back), and if you are not a permanent resident, please provide us with your H-1 or L-1 visa.
Qualify for a Loan
When buying a home, you may be pre-qualified or pre-approved, typically over the phone within a few minutes. A pre-qualification is not as thorough as a pre-approval, where you may be subjected to a more rigorous process, which includes verification of credit, income, assets, and liabilities. It is recommended to become pre-approved before looking for a home. This will help you:
1. Determine the maximum house value you may buy, in order to not waste time looking for a property you cannot afford.
2. Put yourself in a stronger position to negotiate with the seller, because the seller knows that your loan is pre-approved.
3. Close quickly, since your loan is already pre-approved.
Review Loan Programs and Rates
1. Consider how long you plan to own the home. If you plan to sell within a few years, you should consider an adjustable or balloon loan. Conversely, if you plan to remain there for a longer time, you should consider a fixed loan.
2. 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 $100,000 loan equals $1,000. The more points you pay, the lower the rate you will receive.
3. Compare different programs. Choosing a loan can be difficult. With so many programs to choose from, and different rates on each, it is hard to figure out which program is ideal for you. Our experienced mortgage consultants may help you decide which program is most beneficial for you.
Apply For A Loan
Your mortgage consultant will provide all the appropriate loan documents that need to be signed in order to continue the loan process and obtain an approval.
Obtain Approval
Once your loan application has been received, we will start the loan approval process immediately. This involves verifying your:
1. Credit history
2. Employment history
3. Assets including your bank accounts, stocks, mutual funds, and retirement accounts
4. Property value
(Based on your specific situation, additional documents or verifications may be required.)
To improve your chances of becoming approved:
1. Fill out the loan application completely.
2. Respond promptly to any requests of additional documents. This becomes critical if your rate is locked for a limited time or if you plan to close by a certain date.
3. Do not make any major purchases (examples: cars, furniture, or another house) until your loan is closed. Anything that increases your debts may have an adverse affect on your application.
4. Do not deposit money into your bank accounts unless documented thoroughly. If you are receiving money from friends, family or other relatives, please inform your loan officer.
Close The Loan
After your loan is approved and cleared to close, you will be required to sign the final loan documents. This will take place in front of a notary public. Be prepared to:
1. Bring a cashier check for your down payment and closing costs if required. Personal checks are usually not accepted.
2. Review the final loan documents. Make sure that the interest rate and loan terms are what you were promised. In addition, verify that your name and address on the loan documents are accurate.
3. Sign the loan documents.
Federal law requires a three-day rescission period after closing to protect the consumer. It is wise to review the final documents during that time, in order to reaffirm your satisfaction.
Should you have any questions or concerns regarding this process, please contact a loan officer at Manhattan Mortgage Group.
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