Mortgage brokers provide an extremely important service by giving you an unbiased analysis of your situation and the many, many loan programs available. Most lenders want to sell you a loan that earns the most for them. That’s not how we work.
The First Step
The first step in understanding how a mortgage works is to know exactly what a mortgage is – a promise to repay someone for a loan on a property. The property is promised as secured collateral to the lender, so that no matter what happens, the lender knows that their money is reasonably safe. When people talk about mortgages, many times they are actually referring to the loan. There are many types of loans, and most must be paid back in installments over time with interest. All loans share one trait in common: they allow you to leverage debt to purchase an asset that should gain value over time.
The Second Step
An experienced Sistar Mortgage will guide you through the confusing tangle of mortgage options and get one that’s right for you. During our consultation with you, we will look at your long term planning and financial goals and determine if you:
- Have extra reserves on hand to satisfy the loan requirements.
- Have a down payment figure, and what loan program your down payment requirements fit you with.
- Understand the types of loans you qualify for and how they work.
- Understand how your financial organization affects your potential interest rate.
Your loan officer will request your permission to access your income statements and credit report in order to understand your current situation and what the best rate you currently qualify for. If you are not satisfied with the rate that you are receiving, we can offer tips on improving it.
The Third Step
Mortgage (n): A promise to repay a loan on a property.
Next, your loan officer will negotiate the rate and the closing costs with the lenders. The loan officer will take the loan and run it through an automated system to see if the loan is approvable in its current form. Usually, this process takes about a week to know the different scenarios, but with the current declining market, we must take extra care to make sure everything is double checked. Your loan officer will pass your loan on to our processing team, who will order all of the documents required by the lender and the title company. This can include your appraisal, income verifications, title abstraction, and anything else the lender or state requires. Next, the lender will review all the loan paperwork and after they are satisfied that your loan meets their criteria, will return a “Clear to Close”. This begins the run up to the closing, where our processing team will pass all of our information to the title agency so that they can handle your closing.
The Final Step
In the final step, the title company takes over, and the money from your lender is passed to the seller or the seller’s lender. Once all of the paperwork is signed, then you have successfully obtained a loan on a property and are ready to take possession
The Loan Officer will be requiring the following documents:
• Most current paystub showing at least 30 days of year to date income
• Past two years' W2s
• Two years of personal tax returns
• Bank, investment or retirement account statements covering the past two months (all pages)
• Current homeowners insurance declaration page
• Most recent mortgage statemeent
• If ever divorced, a complete divorce decree and separation agreement
• If ever declared bankrupt, complete bankruptcy papers
• Credit explanation letter for any recent or significant derogatory credit issues
• Inquiry explanation letter if you've applied for any forms of credit in the past 90 days
• List of questions regarding mortgage product and programs for loan agent