The Loan Process
Buying a home is a large investment and the CrossCountry Mortgage team is here to provide you with the tools, know-how and support you need throughout the homebuying process.
When it comes time to look for a home loan, the more you understand about the process, the easier and less stressful it will be. Taking time to familiarize yourself with mortgage terminology will save you a lot of confusion as the mortgage loan process progresses. The typical mortgage loan process takes place over 6 steps.
6 Step Process
1 Prepare and gather documents
Do your research and gather all important financial documents. Call us for assistance.
- Fill out and sign Form 1003 — the residential loan application — including the attached fair lending notice, loan info sheet, and credit authorization. Note: Do not use whiteout on this paperwork. Mistakes should be crossed out and initialed.
- Provide copies of W-2s or tax returns for the previous 2 years.
- If you own rental units, provide the most recent rental agreement and tax returns for previous 2 years.
- Provide your last 3 bank statements along with the most recent statements for any mutual funds, IRA/401(k), or stock accounts.
- Provide a settlement agreement and divorce decree (if applicable).
- Provide a letter explaining how you plan to utilize refinance proceeds if you’re seeking a cash-out refinance.
- Non-U.S. citizens must present their Green Card or H-1 or L-1 visa.
- If you’ve filed for bankruptcy, present a schedule of creditors, discharge notice, and filing.
- If you’re applying for a second loan, include the first mortgage note.
2 Qualify for a mortgage
Know the difference between pre-qualification and pre-approval.
- Pre-qualification determines your ability to repay a loan based on information you provide. Only your assets and income are reviewed. You can often
pre-qualify in minutes online or by phone.
Get Pre-Qualified Now
- Pre-approval is a more rigorous process than a pre-qualification. It is a written commitment from a lender to extend a mortgage to you for a specific amount and time period. It involves an analysis of your financial status and credit history. With a pre-approval, you’ll be able to set your budget, negotiate confidently and close faster.
3 Shop for mortgages and rates
Many different types of loan products are available. As you shop for a mortgage, consider how long you plan to live in the home. If you plan on selling the home after only a few years, an adjustable rate mortgage (ARM) might be a viable option. If you plan on living in your home for a long period of time, you may want to consider a fixed rate mortgage.
Learn the differences between points and rates. Points are prepaid interest and are often tax deductible. One point equals 1% of the loan.
Ask a loan officer about loan types that will best suit your needs.
4 Apply for a loan
You can apply for a loan in person, online or through the mail.
5 Get approved for a loan
After selecting and applying for a loan, the approval process begins. Your credit, employment history, assets, property value and more will be verified.
Follow the guidelines below to improve your chance of being approved.
- Complete your application thoroughly.
- Respond to all questions and requests promptly.
- Disclose all other loans and credit, and be available as your closing date approaches.
- Don’t make any major purchases during this time such as a car, appliances, furniture, etc. You should not increase your debt owed or risk for lenders.
- Don’t move money around in your accounts.
For more tips to make your home buying experience go smoothly, visit our Home Buying Guide.
6 Close the loan
Closing typically takes place in the presence of a public notary. You’ll review final documents and make sure the rates and amounts are what you have agreed to. Be prepared to pay any upfront costs such as closing costs and the down payment with a cashier’s check. Personal checks are usually not accepted. Bring your photo ID and possibly a social security card to sign the loan and get your keys!
For more details on the home loan process or questions about terms, contact us today, but there’s no time like right now to find out if you qualify for a loan. Getting pre-qualified is easy! It only takes a few minutes and won’t take any files or documents to get started.
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