Loan Application Questions |
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| Can I
apply for a loan before I find a property to purchase?
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| What is
a credit score and how will my credit score affect
my application? |
| Will the
inquiry about my credit affect my credit score?
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| Will I
be charged any fees if I authorize my credit information
to be accessed? |
| Are we
right for you? |
| Can I
really borrow funds to use towards my down payment?
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| How do
you decide what you need from me to process my loan?
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| I'm self-employed.
How will you verify my income? |
| Will my
overtime, commission, or bonus income be considered
when evaluating my application? |
| I am
retired and my income is from pension or social
security. What will I need to provide? |
| If I
have income that's not reported on my tax return,
can it be considered? |
| How will
rental income be verified? |
| I have
income from dividends and/or interest. What documents
will I need to provide? |
| Do I
have to provide information about my child support,
alimony or separate maintenance income? |
| Will
my second job income be considered? |
| What
can you expect when you apply for a mortgage?
|
| I've
had a few employers in the last few years. Will
that affect my ability to get a new mortgage?
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| I was
in school before obtaining my current job. How do
I complete the application? |
| If my
property's appraised value is more than the purchase
price can I use the difference towards my down payment?
|
| I'm getting
a gift from someone else. Is this an acceptable
source of my down payment? |
| I am
selling my current home to purchase this home. What
type of documentation will be required? |
| I am
relocating because I have accepted a new job that
I haven't started yet. How should I complete the
application? |
| I've
co-signed a loan for another person. Should I include
that debt here? |
| I have
student loans that aren't in repayment yet. Should
I show them as installment debts? |
| How will
a past bankruptcy or foreclosure affect my ability
to obtain a new mortgage? |
| What,
exactly, is an installment debt? |
|
| Can
I apply for a loan before I find a property to purchase?
|
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Yes, applying for a mortgage loan before you find
a home may be the best thing you could do! If you
apply for your mortgage now, we'll issue an approval
subject to you finding the perfect home. We'll issue
a pre-qualification letter on-line instantly. You
can use the pre-qualification letter to assure real
estate brokers and sellers that you are a qualified
buyer. Having a pre-qualification for a mortgage
may give more weight to any offer to purchase that
you make.
When you find the perfect home, you'll simply call
your Loan Officer to complete your application.
You'll have an opportunity to lock in our great
rates and fees then and we'll complete the processing
of your request. |
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What is a credit score and how will my credit score
affect my application? |
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A credit score is one of the pieces of information
that we'll use to evaluate your application. Banks
and other financial institutions have been using
credit scores to evaluate credit card and auto applications
for many years, but only recently have mortgage
lenders begun to use credit scoring to assist with
their loan decisions.
Credit scores are based on information collected
by credit bureaus and information reported each
month by your creditors about the balances you owe
and the timing of your payments. A credit score
is a compilation of all this information converted
into a number that helps a lender to determine the
likelihood that you will repay the loan on schedule.
The credit score is calculated by the credit bureau,
not by the lender. Credit scores are calculated
by comparing your credit history with millions of
other consumers. They have proven to be a very effective
way of determining credit worthiness.
Some of the things that affect your credit score
include your payment history, your outstanding obligations,
the length of time you have had outstanding credit,
the types of credit you use, and the number of inquiries
that have been made about your credit history in
the recent past.
Credit scores used for mortgage loan decisions range
from approximately 300 to 900. Generally, the higher
your credit score, the lower the risk that your
payments won't be paid as agreed.
Using credit scores to evaluate your credit history
allows us to quickly and objectively evaluate your
credit history when reviewing your loan application.
However, there are many other factors when making
a loan decision and we never evaluate an application
without looking at the total financial picture of
a customer. |
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Will the inquiry about my credit affect my credit
score? |
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An abundance of credit inquiries can sometimes
affect your credit scores since it may indicate
that your use of credit is increasing.
But don't overreact! The data used to calculate
your credit score doesn't include any mortgage or
auto loan credit inquiries that are made within
the 30 days prior to the score being calculated.
In addition, all mortgage inquiries made in any
14-day period are always considered one inquiry.
Don't limit your mortgage shopping for fear of the
effect on your credit score. |
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Will I be charged any fees if I authorize my credit
information to be accessed? |
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| There is no charge to you for the credit information
we'll access with your permission to evaluate your
application on-line. You will only be charged for
a credit report if you decide to complete the application
process after your loan is approved. |
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Are we right for you? |
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We are a totally on-line mortgage service offering
instant approvals and the lowest rates and fees
available on the web! Whether you're purchasing
or refinancing, we're certain you'll find our service
amazing!
If you'll be purchasing but haven't found the perfect
home yet, complete our application and we'll issue
an approval for a mortgage loan now with no obligation! |
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Can I really borrow funds to use towards my down
payment? |
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| Yes, you can borrow funds to use as your down
payment! However, any loans that you take out must
be secured by an asset that you own. If you own
something of value that you could borrow funds against
such as a car or another home, it's a perfectly
acceptable source of funds. If you are planning
on obtaining a loan, make sure to include the details
of this loan in the Expenses section of the application. |
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How do you decide what you need from me to process
my loan? |
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| We take full advantage of an automated underwriting
system that allows us to request as little information
as possible to verify the data you provided during
your loan application. Gone are the days when it
was necessary to verify every piece of data collected
during the application. The automated underwriting
system compares your financial situation with statistical
data from millions of other homeowners and uses
that comparison to determine the level of verification
needed. In many cases, a single W-2 or pay stub
can be used to verify your income or a single bank
statement can be used to verify the assets needed
to close your loan. |
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I'm self-employed. How will you verify my income?
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Generally, the income of self-employed borrowers
is verified by obtaining copies of personal (and
business, if applicable) federal tax returns for
the most recent two-year period. However, based
on your entire financial situation, we may not need
full copies of your tax returns.
We'll review and average the net income from self-employment
that's reported on your tax returns to determine
the income that can be used to qualify. We won't
be able to consider any income that hasn't been
reported as such on your tax returns. Typically,
we'll need at least one, and sometimes a full two-year
history of self-employment to verify that your self-employment
income is stable. |
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Will my overtime, commission, or bonus income be
considered when evaluating my application? |
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In order for bonus, overtime, or commission income
to be considered, you must have a history of receiving
it and it must be likely to continue. We'll usually
need to obtain copies of W-2 statements for the
previous two years and a recent pay stub to verify
this type of income. If a major part of your income
is commission earnings, we may need to obtain copies
of recent tax returns to verify the amount of business-related
expenses, if any. We'll average the amounts you
have received over the past two years to calculate
the amount that can be considered as a regular part
of your income.
If you haven't been receiving bonus, overtime, or
commission income for at least one year, it probably
can't be given full value when your loan is reviewed
for approval. |
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I am retired and my income is from pension or social
security. What will I need to provide? |
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We will ask for copies of your recent pension
check stubs, or bank statement if your pension or
retirement income is deposited directly in your
bank account. Sometimes it will also be necessary
to verify that this income will continue for at
least three years since some pension or retirement
plans do not provide income for life. This can usually
be verified with a copy of your award letter. If
you don't have an award letter, we can contact the
source of this income directly for verification.
If you're receiving tax-free income, such as social
security earnings in some cases, we'll consider
the fact that taxes will not be deducted from this
income when reviewing your request. |
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If I have income that's not reported on my tax return,
can it be considered? |
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Generally, only income that is reported on your
tax return can be considered when applying for a
mortgage. Unless, of course, the income is legally
tax-free and isn't required to be reported.
Some lenders may offer a stated income program,
which means that you can be qualified for a loan
based on the income you state rather than that which
can be verified. Usually these programs require
larger down payments and offer interest rates that
are substantially higher than regular mortgage rates.
We do not offer stated income programs at this time. |
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How will rental income be verified? |
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If you own rental properties, we'll generally
ask for the most recent year's federal tax return
to verify your rental income. We'll review the Schedule
E of the tax return to verify your rental income,
after all expenses except depreciation. Since depreciation
is only a paper loss, it won't be counted against
your rental income.
If you haven't owned the rental property for a complete
tax year, we'll ask for a copy of any leases you've
executed and we'll estimate the expenses of ownership. |
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I have income from dividends and/or interest. What
documents will I need to provide? |
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| Generally, two years personal tax returns are
required to verify the amount of your dividend and/or
interest income so that an average of the amounts
you receive can be calculated. In addition, we will
need to verify your ownership of the assets that
generate the income using copies of statements from
your financial institution, brokerage statements,
stock certificates or Promissory Notes.
Typically, income from dividends and/or interest
must be expected to continue for at least three
years to be considered for repayment.
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Do I have to provide information about my child
support, alimony or separate maintenance income?
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| Information about child support, alimony, or separate
maintenance income does not need to be provided
unless you wish to have it considered for repaying
this mortgage loan. |
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Will my second job income be considered? |
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| Typically, income from a second job will be considered
if a one-year history of secondary employment can
be verified. |
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What can you expect when you apply for a mortgage?
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First, you'll complete our
on-line application.
The application will ask you questions about
the home and your finances and takes less than
20 minutes to complete. As soon as you've finished
the application we'll review your request for
instant approval. If your application is approved
on-line, we'll ask you for a deposit to cover
the cost of the appraisal on your home so that
we can begin to process your request immediately.
This deposit will be credited towards your closing
fees at closing.
After completing your application, a Loan Officer
will contact you to introduce himself or herself
and to answer any questions you may have. Your
Loan Officer is a mortgage expert and will provide
help and guidance along the way. If your request
wasn't approved on-line, he or she will ask you
for any information required to make a decision
about your loan.
If you are purchasing a new home, the Loan Officer
will also contact the Real Estate Broker or the
seller so that they'll know whom to contact with
questions.
We'll send you an application kit and prepare
your loan for closing.
The application kit will be sent using a one-day
delivery service and will contain papers for you
to sign and a list of items we'll need to verify
the information you provided about your finances
during the on-line application.
We'll order the appraisal from a licensed appraiser
who is familiar with home values in your area.
Depending on your finances and the loan amount
requested, different types of appraisals are used.
Sometimes the appraiser will need to view the
home. Sometimes they are able to do their evaluation
from the street.
Title insurance will be necessary. If you're
purchasing a home, we'll work with the real estate
broker or seller to ensure the title work is ordered
as soon as possible. If you are refinancing we'll
take care of ordering the title work for you.
We'll use the title insurance to confirm the legal
status of your property and to prepare the closing
documents.
Your Loan Officer will keep you informed every
step of the way via e-mail. Status information
is also available on-line 24 hours a day.
We'll contact you to coordinate your closing
date.
After we received the application kit back from
you and the appraisal and title work, we'll contact
you to schedule your loan closing. If you are
purchasing a home, we'll also schedule the closing
with the real estate broker and the seller.
The closing will take place at the office of
a title company or attorney in your area who will
act as our agent. A few days before closing, your
Loan Officer will contact you to walk through
the final information so that there won't be any
surprises at closing.
That's all there is to it! You're on your
way to the most convenient home loan ever!
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I've had a few employers in the last few years.
Will that affect my ability to get a new mortgage?
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Having changed employers frequently is typically
not a hindrance to obtaining a new mortgage loan.
This is particularly true if you made employment
changes without having periods of time in between
without employment. We'll also look at your income
advancements as you have changed employment.
If you're paid on a commission basis, a recent job
change may be an issue since we'll have a difficult
time of predicting your earnings without a history
with your new employer. |
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I was in school before obtaining my current job.
How do I complete the application? |
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| If you were in school before your current job,
enter the name of the school you attended and the
length of time you were in school in the "length
of employment" fields. You can enter a position
of "student" and income of "0." |
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If my property's appraised value is more than the
purchase price can I use the difference towards
my down payment? |
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Unfortunately, if you are purchasing a home, we'll
have to use the lower of the appraised value or
the sales price to determine your down payment requirement.
It's still a great benefit for your financial situation
if you are able to purchase a home for less than
the appraised value, but our investors don't allow
us to use this "instant equity" when making our
loan decision. |
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I'm getting a gift from someone else. Is this an
acceptable source of my down payment? |
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Gifts are an acceptable source of down payment,
if the gift giver is related to you or your co-borrower.
We'll ask you for the name, address, and phone number
of the gift giver, as well as the donor's relationship
to you.
If your loan request is for more than 80% of the
purchase price, we'll need to verify that you have
at least 5% of the property's value in your own
assets.
Prior to closing, we'll verify that the gift funds
have been transferred to you by obtaining a copy
of your bank receipt or deposit slip to verify that
you have deposited the gift funds into your account. |
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I am selling my current home to purchase this home.
What type of documentation will be required? |
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| If you're selling your current home to purchase
your new home, we'll ask you to provide a copy of
the settlement or closing statement you'll receive
at the closing to verify that your current mortgage
has been paid in full and that you'll have sufficient
funds for our closing. Often the closing of your
current home is scheduled for the same day as the
closing of your new home. If that's the case, we'll
just ask you to bring your settlement statement
with you to your new mortgage closing. |
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| I
am relocating because I have accepted a new job
that I haven't started yet. How should I complete
the application? |
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Congratulations on your new job! If you will be
working for the same employer, complete the application
as such but enter the income you anticipate you'll
be receiving at your new location.
If your employment is with a new employer, complete
the application as if this were your current employer
and indicate that you have been there for one month.
The information about the employment you'll be leaving
should be entered as a previous employer. We'll
sort out the details after you submit your loan
for approval. |
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| I've
co-signed a loan for another person. Should I include
that debt here? |
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| Generally, a co-signed debt is considered when
determining your qualifications for a mortgage.
If the co-signed debt doesn't affect your ability
to obtain a new mortgage we'll leave it at that.
However, if it does make a difference, we can ignore
the monthly payment of the co-signed debt if you
can provide verification that the other person responsible
for the debt has made the required payments, by
obtaining copies of their cancelled checks for the
last six months. |
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| I
have student loans that aren't in repayment yet.
Should I show them as installment debts? |
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Any student loan that will go into repayment within
the next six months should be included in the application.
If you are not sure exactly what the monthly payment
will be at this time, enter an estimated amount.
If other student loans are reflected on your final
credit report, which will not go into repayment
in the next six months, we may need to ask you for
verification that repayment will not be required
during this time period. |
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| How
will a past bankruptcy or foreclosure affect my
ability to obtain a new mortgage? |
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| If you've had a bankruptcy or foreclosure in the
past, it may affect your ability to get a new mortgage.
Unless the bankruptcy or foreclosure was caused
by situations beyond your control, we will generally
require that two to four years have passed since
the bankruptcy or foreclosure. It is also important
that you've re-established an acceptable credit
history with new loans or credit cards. |
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| What,
exactly, is an installment debt? |
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| An installment debt is a loan that you make payments
on, such as an auto loan, a student loan or a debt
consolidation loan. Do not include payments on other
living expenses, such as insurance costs or medical
bill payments. We'll include any installment debts
that have more than 10 months remaining, when determining
your qualifications for this mortgage. |
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