Can I apply for a loan before I find a property to purchase?
No, when applying for a mortgage without a property being chosen, it is considered a pre-approval, which is currently not offered online. Please contact a Mortgage Representative who can assist you in applying for a pre-approval.
What is a credit score and how will my credit score affect my application?
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 an applicant.
Will I be charged any fees if I authorize my credit information to be accessed?
We do not charge a fee at the time of application but will charge a credit report fee at the time of closing.
Can I really borrow funds to use towards my down payment?
Yes, you can borrow funds to use as your down payment, as long as the loan you take out is secured by an asset that you own. If you are planning on obtaining a loan, make sure to include the details of this loan in the Expenses section of the application.
How do you decide what you need from me to process my loan?
We take advantage of an automated underwriting system that may allow us to request as little information as possible to verify the data you provided during your loan application.
I'm self-employed. How will you verify my income?
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.
Will my overtime, commission or bonus income be considered when evaluating my application?
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.
I am retired and my income is from pension or social security. What will I need to provide?
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 certain social security earnings, we'll consider the fact that taxes will not be deducted from this income when reviewing your request.
If I have income that's not reported on my tax return, can it be considered?
Generally, only income that is reported on your tax return can be considered when applying for a mortgage, unless, the income is legally tax-free and isn't required to be reported. In this case, additional documentation will be required.
How will rental income be verified?
If you own rental properties, we'll generally ask for the most recent year's federal tax return including your Schedule E to verify 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.
I have income from dividends and/or interest. What documents will I need to provide?
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.
Do I have to provide information about my child support, alimony or separate maintenance income?
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.
Will my second job income be considered?
Typically, income from a second job will be considered if a one-year history of secondary employment can be verified.
I've had a few employers in the last few years. Will that affect my ability to get a new mortgage?
Having changed employers frequently is typically not a hindrance to obtaining a new mortgage loan. This is particularly true if you made employment changes within the same field and 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 predicting your earnings without a history with your new employer.
I was in school before obtaining my current job. How do I complete the application?
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."
If my property's appraised value is more than the purchase price can I use the difference towards my down payment?
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.
I'm getting a gift from someone else. Is this an acceptable source of my down payment?
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 statement or deposit receipt.
I am selling my current home to purchase this home. What type of documentation will be required?
If you're selling your current home to purchase your new home, we'll ask you to provide a copy of the fully executed Purchase and Sale Agreement. In addition we will require a copy of the settlement statement to evidence 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.
I am relocating because I have accepted a new job that I haven't started yet. How should I complete the application?
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 employer you'll be leaving should be entered as a previous employer. Feel free to explain this further in the section that allows additional comments before you submit your loan application.
I've co-signed a loan for another person. Should I include that debt here?
Generally, a co-signed debt is considered when determining your qualifications for a mortgage. We can exclude 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 12 months.
I have student loans that aren't in repayment yet. Should I show them as installment debts?
Any student loan that will go into repayment will be used to determine your qualification for a mortgage. If you are not sure exactly what the monthly payment will be at this time, enter an estimated amount.
How will a past bankruptcy or foreclosure affect my ability to obtain a new mortgage?
If you've had a bankruptcy or foreclosure in the past, it may affect your ability to get a new mortgage. Generally we require that two years has passed since the discharge of the bankruptcy or foreclosure. It is also important that you've re-established an acceptable 12-month credit history with new loans or credit cards.
What, exactly, is an installment debt?
An installment debt is a fixed-term loan on which you make scheduled payments, 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.
Should I fax the information needed from me?
We can accept faxed copies of most of the documents we'll need from you. Please contact your Mortgage Representative who can coordinate this with you.
How will I receive status updates?
Keeping you informed of the status of your application is an important part of our process. We'll contact you either by via e-mail or phone as we receive the information necessary to complete your application.
If you have any specific questions during the process, contact your Mortgage Representative. Your Mortgage Representative would be happy to provide any information you require.
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