The Lending Process:
Pre-Qualification:
You can ‘pre-qualify’ for a loan before formally applying for a loan. The lender gathers information
from you about your income and debts and makes a preliminary financial determination about how
much house you may be able to afford. Usually, a pre-qualification letter is issued showing the
amount for which the lender has pre-qualified you.
Please understand that the lender will take the information that you give about your income, assets
and debts in order to pre-qualify you. The pre-qualification is only as good as the information that you
give, and is subject to the lender’s verification of that information during the formal application
process.
It's a good idea to know how expensive a home you can afford before you start shopping for one, and
a pre-qualification from a lender can help. If you can provide a pre-qualification letter, sales agents
and sellers will know that you are an able buyer and may take your offer more seriously. A pre-
qualification letter may sway a home seller to negotiate with you as opposed to another buyer who is
not pre-qualified. If you are refinancing the loan on your existing home, then the pre-qualification
process should help you decide whether refinancing is a good idea for you.
Selecting A Mortgage Program:
The selection of a mortgage program can be rather complicated, and we highly recommend that a
mortgage professional help you with the decision process. There are a countless number of loan
products available in the marketplace today, and the guidelines for these products change
continually. A mortgage professional that stays current on these programs can play a valuable role in
analyzing your options.
The most common types are the fixed-rate programs where the monthly interest and principal
payments are fixed for the life of the loan. Other programs, referred to as ‘adjustable-rate’ loans,
allow for the interest rate to change at specified intervals. The interest rate on adjustable-rate loans
can go up or down depending on changes to the index interest rate on which the loan’s interest rate
is based. Some adjustable-rate loans allow for a fixed period, such as one, three or five years,
before the interest rate becomes adjustable. After that fixed period, the interest rate will change each
year thereafter.
Another program for specific needs is called a “balloon” mortgage. Balloon programs are ideal for
borrowers who know they will not occupy the home for long periods of time.
Application:
Application is actually the beginning of the formal loan process and usually occurs after you have
found a property you want to buy or have determined that you wish to refinance the loan on your
existing home. With the help of your loan officer, you complete a mortgage application for a
particular loan program and supply all of the required documentation for processing. Your loan
officer will discuss various fees, rate-lock and down payment options with you at this time.
Processing Your Loan Application:
The lender's loan processor reviews the credit reports and documentation that you supplied as part
of your loan application to verify your income, assets, employment, debts, and payment histories.
The processor will contact your employer and bank directly to verify your relationship with them. If the
credit report indicates unacceptable late payments, collections or judgments or other credit history
issues, then the processor will request a written explanation from you. If there are incorrect entries
on your credit report, the loan processor will work with you to get them removed.
The processor will also order and review a title company commitment to issue a title policy on the
property insuring your ownership and the lender’s lien. The processor
will also order and review the property appraisal. The appraised value of the property is essential,
since the property serves as the sole security for the loan. The appraised value, as part of the loan-to-
value (LTV) calculation, will also determine how large a loan the lender can make based on that
security.
Underwriting Your Loan Application:
Once we has received all the information that we need through processing your loan application, we
will ‘underwrite’ your application, which means that we will compare your credit and income
information and the property you want to finance against our loan guidelines for the loan product you
want. Generally, we will look for verified, stable income, manageable debts (including the anticipated
payment on the house you wish to finance), and a credit history, as shown through your credit report,
indicating a willingness and an ability to repay money lent to you. We will review the property
appraisal to be sure that it indicates a value sufficient to justify the loan amount, as well as a house
in good enough condition to meet our guidelines.
Decision:
We at Ohio State Lending will do everything we can to get your loan application approved. In some
cases, we are not able to get the loan application approved because it does not meet certain
guidelines. If that occurs, we do offer a full range of alternative loan products for which you may
qualify, and we will be glad to have your application considered for one of these products so that you
can reach your home ownership goals.
Closing:
We will schedule a closing date with a title and escrow company. At closing you will sign the
documentation to take ownership of your home (if you are purchasing) or
sign the documentation for the refinance of your home. Once this is finished you
will then receive information and payment coupons from the Lender.
You can ‘pre-qualify’ for a loan before formally applying for a loan. The lender gathers information
from you about your income and debts and makes a preliminary financial determination about how
much house you may be able to afford. Usually, a pre-qualification letter is issued showing the
amount for which the lender has pre-qualified you.
Please understand that the lender will take the information that you give about your income, assets
and debts in order to pre-qualify you. The pre-qualification is only as good as the information that you
give, and is subject to the lender’s verification of that information during the formal application
process.
It's a good idea to know how expensive a home you can afford before you start shopping for one, and
a pre-qualification from a lender can help. If you can provide a pre-qualification letter, sales agents
and sellers will know that you are an able buyer and may take your offer more seriously. A pre-
qualification letter may sway a home seller to negotiate with you as opposed to another buyer who is
not pre-qualified. If you are refinancing the loan on your existing home, then the pre-qualification
process should help you decide whether refinancing is a good idea for you.
Selecting A Mortgage Program:
The selection of a mortgage program can be rather complicated, and we highly recommend that a
mortgage professional help you with the decision process. There are a countless number of loan
products available in the marketplace today, and the guidelines for these products change
continually. A mortgage professional that stays current on these programs can play a valuable role in
analyzing your options.
The most common types are the fixed-rate programs where the monthly interest and principal
payments are fixed for the life of the loan. Other programs, referred to as ‘adjustable-rate’ loans,
allow for the interest rate to change at specified intervals. The interest rate on adjustable-rate loans
can go up or down depending on changes to the index interest rate on which the loan’s interest rate
is based. Some adjustable-rate loans allow for a fixed period, such as one, three or five years,
before the interest rate becomes adjustable. After that fixed period, the interest rate will change each
year thereafter.
Another program for specific needs is called a “balloon” mortgage. Balloon programs are ideal for
borrowers who know they will not occupy the home for long periods of time.
Application:
Application is actually the beginning of the formal loan process and usually occurs after you have
found a property you want to buy or have determined that you wish to refinance the loan on your
existing home. With the help of your loan officer, you complete a mortgage application for a
particular loan program and supply all of the required documentation for processing. Your loan
officer will discuss various fees, rate-lock and down payment options with you at this time.
Processing Your Loan Application:
The lender's loan processor reviews the credit reports and documentation that you supplied as part
of your loan application to verify your income, assets, employment, debts, and payment histories.
The processor will contact your employer and bank directly to verify your relationship with them. If the
credit report indicates unacceptable late payments, collections or judgments or other credit history
issues, then the processor will request a written explanation from you. If there are incorrect entries
on your credit report, the loan processor will work with you to get them removed.
The processor will also order and review a title company commitment to issue a title policy on the
property insuring your ownership and the lender’s lien. The processor
will also order and review the property appraisal. The appraised value of the property is essential,
since the property serves as the sole security for the loan. The appraised value, as part of the loan-to-
value (LTV) calculation, will also determine how large a loan the lender can make based on that
security.
Underwriting Your Loan Application:
Once we has received all the information that we need through processing your loan application, we
will ‘underwrite’ your application, which means that we will compare your credit and income
information and the property you want to finance against our loan guidelines for the loan product you
want. Generally, we will look for verified, stable income, manageable debts (including the anticipated
payment on the house you wish to finance), and a credit history, as shown through your credit report,
indicating a willingness and an ability to repay money lent to you. We will review the property
appraisal to be sure that it indicates a value sufficient to justify the loan amount, as well as a house
in good enough condition to meet our guidelines.
Decision:
We at Ohio State Lending will do everything we can to get your loan application approved. In some
cases, we are not able to get the loan application approved because it does not meet certain
guidelines. If that occurs, we do offer a full range of alternative loan products for which you may
qualify, and we will be glad to have your application considered for one of these products so that you
can reach your home ownership goals.
Closing:
We will schedule a closing date with a title and escrow company. At closing you will sign the
documentation to take ownership of your home (if you are purchasing) or
sign the documentation for the refinance of your home. Once this is finished you
will then receive information and payment coupons from the Lender.
M.B. 803676.000
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Copyright (C) 2004-2009 Hager Investments llc. dba Ohio State Lending
| Ohio State Lending |
The Lending Process
