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What to Expect
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Complete forms online Credit Underwriting Conditional approval Acceptance Rate Lock or Float Documentation Appraisal Loan documents Closing

 

Complete forms online

Whether you complete the full application (apply online) or the short application (refinance or pre-qualify), you will begin the loan process. By submitting either application, you may have to agree to allow the mortgage provider to pull a credit report. In doing so the mortgage provider will pull a credit report and merge the data with your application. The combined data will be used for the underwriter’s review and approval.

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Credit Underwriting (automated electronic underwriting)

In most cases, your information will be processed by an electronic underwriting system. This allows the provider to give quick and accurate approvals. If for any reason the loan is denied by the automated system, it is referred to an experienced underwriter for review and reconsideration. The underwriter will make recommendations and prepare a report for your review.

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"Conditional Approval" (a list of items that you are required to provide the underwriter)

Upon completion of the review, the underwriter will formulate an "conditional approval" that lists your loan type, rate, term, and conditions. Conditions may include documents to prove income, job stability, cash on hand, down payment, cash reserves, investment accounts, etc. You should review this document thoroughly as it contains important details to your transaction. If you have any questions about your approval, you should contact the mortgage provider immediately. If you do not know how to contact your mortgage provider, you may call customer service at RealEstateEspanol.com between the hours of 9:00 am and 5:00 pm PST, using our toll free number (800) 964-5373.

Items that you may need to provide will support the information stated on your application. The usual items are:

    1. Personal Tax Returns (federal 1040 only) for the past two years filed. If you have not filed the most recent year the past two years plus a copy of your extension will be necessary;
    2. Proof of funds required to close the loan transaction plus 2 months reserves. This can be a checking account, savings account, stock account, 401k, IRA, retirement account, or other account that could be converted to cash. The e-underwriter will ask for a minimum of 3 months bank statements to support your application;
    3. Last 2 paystubs It is necessary to document the most recent 30 day pay history, therefore, it is typical that you will be asked to provide us with your last 2 paystubs if paid every two weeks, or your last 4 if you are paid weekly;
    4. Proof of Self Employment may be necessary under certain circumstances. If asked, you will need to provide a license or tax certificate that dates back at least two years. Our e-underwriters prefer that you provide a business license if possible;
    5. W-2’s for past two years. If you have been employed for the past two years, you will be asked to provide all of your W-2s for the past two years. This helps the e-underwriter establish your employment history;
    6. Credit Explanations may be required if you have been any past or present problems. While we may overlook the state of your liabilities, our e-underwriters like to know what event occurred that caused a problem;
    7. Mortgage Ratings are necessary for almost every loan. Your credit risk grading is dramatically affected by the timeliness of your mortgage rating, however, we are only interested in the past 12 months. Therefore, you will be asked for the name address and account number of each outstanding mortgage;
    8. Cancelled Checks may be required to prove that you are or are not responsible for a credit liability, or to prove that your business pays a certain debt that may be listed on your personal credit report. If asked, please remember to photocopy both the front and back of your check before sending it to us;
    9. Bank Statements are required on most loans. Our e-underwriters believe that "cash is king" and like to see (a) a borrower has the ability to save, and (b) that the borrower has sufficient cash flow (deposits). We even have a loan program for borrowers who can only qualify using 12 months cash flow through there personal checking account;
    10. Bankruptcy Papers: If you have had a bankruptcy in the past seven years, you will need to provide us with a complete copy of the bankruptcy papers including a copy of the discharge document. The discharge document provides us with the date that the bankruptcy was finalized or discharged from the courts;
    11. Divorce Decree: If you have been divorced, it will be necessary to provide a copy of your divorce decree or MSA (Marital Settlement Agreement) as these documents provide details of the division of assets and liabilities, as well as any monthly income or debt that has been ordered by the court;
    12. Purchase Transactions require many special documents and will be specified under the misc. conditions on the bottom of your approval. If you have specific questions regarding these documents you should consult with your Agent or contact our office so that we can explain why we require the document;
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Acceptance (do you like the offer ?)

Once you have reviewed your approval, you must let us know that you have accepted the terms as offered. You will be instructed by the mortgage provider to contact them via phone or email so that they are aware of your decision to complete the transaction.

 

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Rate Lock, Float or return to Mortgage Center for another quote.

The rate, term and cost of your approval are based on a risk grade or credit grading process. Underwriters are trained to consider all.htmlects and compensating factors of borrower qualifications. If you have questions regarding the rate, term, or other condition, you should contact your mortgage provider via email, upon which your question will be routed to the proper representative for a quick response. Upon your review of the offer, you have three choices; you can

    1. Accept the offer and lock the rate;
    2. Accept the offer and "float" the rate;
    3. Reject the offer and go back to the mortgage center to get another quote from one of our many professional service providers.

If you accept the offer, you can either lock or float the rate. Rate locks guarantee the terms of a mortgage for a given period of time. For example, a 30 day lock at 7.5% 0 points means that the mortgage company must close the loan within 30 days to avoid market fluctuations which could, in turn, change parameters of your loan.

If you "float" the rate, that means that you have accepted the offer but choose to pick a rate at a later date (usually due to your impression that the market rates may decrease). THIS IS NOT ADVISED IN A RISING MARKET.

If you reject that offer given by the first mortgage provider, try another lender from our mortgage center to see if they can improve upon your rate. However, if you are uncertain about the program offered, please call the mortgage provider for further information.

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Documentation

Items that you may need to provide will support the information stated on your application. The usual items are:

    1. Personal Tax Returns (federal 1040 only) for the past two years filed. If you have not filed the most recent year the past two years plus a copy of your extension will be necessary;
    2. Proof of funds required to close the loan transaction plus 2 months reserves. This can be a checking account, savings account, stock account, 401k, IRA, retirement account, or other account that could be converted to cash. The e-underwriter will ask for a minimum of 3 months bank statements to support your application;
    3. Last 2 paystubs It is necessary to document the most recent 30 day pay history, therefore, it is typical that you will be asked to provide us with your last 2 paystubs if paid every two weeks, or your last 4 if you are paid weekly;
    4. Proof of Self Employment may be necessary under certain circumstances. If asked, you will need to provide a license or tax certificate that dates back at least two years. Our e-underwriters prefer that you provide a business license if possible;
    5. W-2’s for past two years. If you have been employed for the past two years, you will be asked to provide all of your W-2s for the past two years. This helps the e-underwriter establish your employment history;
    6. Credit Explanations may be required if you have been any past or present problems. While we may overlook the state of your liabilities, our e-underwriters like to know what event occurred that caused a problem;
    7. Mortgage Ratings are necessary for almost every loan. Your credit risk grading is dramatically affected by the timeliness of your mortgage rating, however, we are only interested in the past 12 months. Therefore, you will be asked for the name address and account number of each outstanding mortgage;
    8. Cancelled Checks may be required to prove that you are or are not responsible for a credit liability, or to prove that your business pays a certain debt that may be listed on your personal credit report. If asked, please remember to photocopy both the front and back of your check before sending it to us;
    9. Bank Statements are required on most loans. Our e-underwriters believe that "cash is king" and like to see (a) a borrower has the ability to save, and (b) that the borrower has sufficient cash flow (deposits). We even have a loan program for borrowers who can only qualify using 12 months cash flow through there personal checking account;
    10. Bankruptcy Papers: If you have had a bankruptcy in the past seven years, you will need to provide us with a complete copy of the bankruptcy papers including a copy of the discharge document. The discharge document provides us with the date that the bankruptcy was finalized or discharged from the courts;
    11. Divorce Decree: If you have been divorced, it will be necessary to provide a copy of your divorce decree or MSA (Marital Settlement Agreement) as these documents provide details of the division of assets and liabilities, as well as any monthly income or debt that has been ordered by the court;
    12. Purchase Transactions require many special documents and will be specified under the misc. conditions on the bottom of your approval. If you have specific questions regarding these documents you should consult with your Agent or contact our office so that we can explain why we require the document;
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Appraisal

The appraisal is a very important.htmlect of the loan process. It establishes the value from which we can calculate the Loan to Value ("LTV"). The appraiser will call to schedule an inspection of your property. Prior to meeting with you, the appraiser will search sales data to establish a price range for [recently] sold homes in your area. From this data, the appraiser can reasonably estimate what your home could sell for under current market conditions. It usually takes a week to ten days for the appraiser to complete the report. Please schedule the earliest possible inspection date so that it will not delay your closing;

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Ordering and Signing the loan documents

Loan documents are ordered once the approval conditions are cleared. If you haven’t locked your rate, now is the time. Once the documents are drafted, they will be forwarded to a closing agent in your area. Upon receipt, the closing agent will call to schedule an appointment. If there are any remaining [closing] conditions, you will be instructed to bring them with you to the doc signing. DOCUMENTS NEED TO BE NOTARIZED, therefore, make sure that you bring identification with you to the signing such as a drivers license or other picture ID.

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Closing (funding and recording the deed )

When your mortgage provider receives the loan documents, they are checked for completeness, then setup for funding. The setup process may take a couple of days then the loan funds are wired to the title company or closing agent. The title company or closing agent pays off any existing liens against the property and disburses the balance of funds to any other third party or person(s) that are entitled. The remaining proceeds are paid to you. The loan is closed !


 


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