Understanding the Home Loan Process

Welcome back to my video blog! Today, I have with me Melissa Rau from Top Flight Financial. She’s here to help us understand the loan process a little better.

Tell us about the process.

One of the most important things to keep in mind is to be patient. The process can be lengthy.

When you first apply we will need some basic information: full name, address, phone number, place of employment, income and assets. With that information we are able to pull your credit and run numbers to see what programs you qualify for.

After the purchase agreement, what documentation is needed?

Once the purchase agreement is fully executed, we need the past two years of W2s, a year-to-date pay stub, your federal tax returns and two complete months of bank statements. These are then submitted to underwriting.

How long does it take from purchase agreement to the time they can say it’s theirs?

It really depends on the type of financing, but you can expect nothing less than 30 days. If you are with a government program it can take longer.

Explain more about government programs.

Rural Development is a great program that offers low interest rates than FHA or conventional financing. However, the process can take longer because it can be contingent repairs and appraisals, etc. The mortgage insurance is also significantly lower on government programs.

What is mortgage insurance?

Mortgage insurance is for when you don’t have 20 percent down on your financing. It is considered somewhat of a risk for the lender. Mortgage insurance helps insure that if you default on your payments, there is another company that will help pay. For Rural Development and FHA loans the insurance lasts the life of the loans.  Conventional loans require mortgage insurance up to 78 percent of the home value.

Thanks for watching everyone! I want to thank Melissa for joining us today and if you have any questions please give me a call!