Welcome Letter, Checklist for Loan Application and Detail of the Process
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My Commitment to you – First of all, thank you for applying for a loan. I look forward to helping you even if it means we do not do a loan, if it doesn’t improve your financial position at this time. As you know, there are many changes being implemented to improve the volatile lending industry. My commitment to you is improving your current situation. That means if for some reason the loans available don’t do that, then we’ll wait until something is available that does improve your situation.
What you can expect and what to do to help me make things go smoother.
1.) This master list WILL be added to as we go along the process, from several departments so thank you for being ready to provide items and sign forms at the time they are requested. I’ll help you get most of it up front.
2.) On page 2: Items #1, #4, #5 are recurring, meaning you get new ones weekly or monthly so I will need your most current one including ALL pages so please plan to send them to me regularly.
3.) In any transaction from refinance to purchase, there are from 30-60 people involved in the process to complete and close the loan/sale. No matter the years of experience or number of transactions closed, there can and will be unexpected delays beyond our control. Thank you for being understanding and flexible, should we have any type of unforeseeable delay. I apologize in advance for redundancy, etc. that can seem like its part of the process. Lenders do have reasons for all the things they ask for. I also thank you in advance for your patience while we work together on your file.
Credit – We will need to pull your credit report at the beginning of the loan application to determine program and pricing. Even if you have one or know your score, to be compliant we need to order one through an approved service provider that is specifically for the mortgage loan process. When you are using your credit, having a mortgage lender pulling a credit report and shopping within a 30 day window is not going to harm your score. Numerous credit report pulls over a several month window of time, even if you don’t do a new loan, can signal to the others there was some problem and that is what could lower your score. Call me directly to arrange payment for the report. You will immediately get a copy for your records.
NEXT STEP – Once I have received all of the items on the list on page 2 that apply to you, I will be able to help you complete your loan application and shop several lenders on your behalf for the best priced loan rates and products to meet your needs. Once you are happy with a particular loan, I can e-mail or mail your loan application package for to you to sign and return for the DU or formal manual underwritten loan approval.
After the loan approval is issued, the lender will send you a notice of disclosure via mail or email so be in communication with me on who that will be. You will need to respond that you have received them from the lender as a dual disclosure measure. Then after the lender orders it, the appraiser will be selected and contact you/your agent to schedule the appraisal inspection. Last is final approval, then escrow signing, then funding/closing. See page 3 for a more detailed outline of the whole process.
Everything is subject to change at the lenders discretion although I will do my best to stay as close to the original GFE as possible. Another GOOD change in the industry is we have to over quote the cost and rate within but not under a certain margin…meaning you should be getting better than the quote if all goes well and we can catch a good rate dip to lock in. No one in the industry can under quote what they can’t lock in that day. Locks are also not approved to be locked by the lender in most cases until your loan has been formally approved and is past certain points in the closing process.
I want to thank you again for choosing to work with me and my team. My business is run on a referral only basis, so that I can dedicate more time to you person to person and at hours most lenders would never think of. If you run across a friend, family member, co-worker, group member and you feel that I have earned the right to ask for their business, I will be happy to help them too. Feel free to call me about their situation, or when they are ready they can call me. Thank you again, and I look forward to working with you.
Adrean J. Rudie
Cell &Text 949-244-2821
WA #MLO-73945 WA Lic/Cert #1131 CA BRE#01871076
Loan Application Process and Checklist
Items needed for loan process:
These items are typical for most lenders for most types of loan transactions, purchase or refinance. Please review all and send what applies to your situation. Ask me if you aren’t sure of something. Depending on the computer generated loan approval; some items may be added or omitted. (Final approval is subject to manual verification by an underwriter, after property is identified and under contract unless it’s a refinance.) Please provide the following ALL PAGES of the items so that I may better help you qualify for the best program to fit your personal needs. The more complete the file, the faster and often cheaper!
SCAN E-Mail or FAX to me (949)340-8012 Best method Sharefile- I will set you up and email you…
- The most current full month pay-stubs for each borrower, showing year to date earnings- Include December 31st if you do not yet have your prior year W2 or 1099. Please send these automatically every time you get a new one…
- Last 2 years W2’s or 1099 for each employer; from each borrower (please give dates at each job if more than 1)
- Last 2 years income tax returns, include all schedules (or year end pay stubs for prior year if return not filed) Please SIGN PAGE 2!
- Most current 3 months, consecutive bank statements (please include all pages even if last one is blank…lenders auditor will hold up funding on this)
- Most current 1month or quarterly (or if annual) statement for all retirement & investment accounts (all pages on this also please, again auditors will hold up closing if all pages are not there.)
- Name, address, agent and phone # for Insurance Company you plan to use, for binder. Or I can refer you someone.
- Payment for that appraisal is due at the time it is ordered and paid via credit/debit card. We can collect payment information at the time of application if you are comfortable. Then will be applied as a credit to your loan closing costs. Costs range from $450-$850 if Jumbo, multi-unit or commercial, $550 being the average. The lender will select the appraiser as of 4/27/09; we no longer have any contact with appraisers.
- Per the US Patriot. Act. As of 10/03, 2 pieces of ID are mandatory for each borrower. Common: driver’s license and passport.
- If doing are a refinance, stand alone 2nd, or FHA Streamline we need a copy of the existing “Promissory NOTE” from the package that you got at escrow when you closed on the purchase or most current refinance of the first mortgage in order to calculate the streamline and verify benefit to you before applying for the loan.
- Original Certificate of Eligibility AND DD-214 on VA loans. Also let me know if you are exempt from funding fee.
- Other items if applicable: Please review
- Last 2 years Corporate/ Partnership Tax Returns (all schedules, and all pages)
- Year-to-date Profit & Loss and Balance Sheet (through most recent quarter)
- If you are applying for a commercial loan – also a financial statement
- Business License if self-employed – at some point 3rd party verification may be required such as letter from CPA.
- Rental Agreements and rent rolls for all rental properties – lending guidelines require 6 months reserves for each rental-
- Divorce Decree, to document debt owed or to show that it is not owed, or to document income that is received from child support, only if you wish to reveal the income received to be considered as a basis for repaying the loan. Complete copy of Divorce Decree and any parenting plan will be required.
- Condo/PUD: name, address and phone # of contact person for the Home Owners Association.
- Bankruptcy documents if filed in the past 7 years. (Includes CH 7, 11, 13.) Please include all pages.
- If credit issues please write a page or less explanation letter for any and all credit issues and reason. (Ex: divorce, medical, etc.) I will help you go over it before submitting to underwriting.
- If you are applying for a construction loan, more detailed information will be needed about the builder at a later date. You can expect to provide a description of materials, contractors cost breakdown and builder resume. Depending on the lender, it will more than likely need to be completed on their forms.
- SHORT SALE- If you are buying a short sale or REO, there may be additional items required, including filling out several forms with mainly the same information for the lender who is currently the lien holder in addition to your new lender that we will be getting your new loan with. These can take from 3-12 months to close depending on liens.
Thank you again for your cooperation. I apologize in advance for redundancy, etc. that can seem like its part of the process. Lenders do have reasons for all the things they ask for. I also thank you in advance for your patience while we work together on your file.
Loan Application and Closing Process
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There are several things going on at the same time with each loan. There are anywhere form 30-60 people involved in closing your loan when you take into account the title company, appraisers, underwriter, all the way down to the courier and clerk at the county recording final numbers. There are several steps we just have to wait for and be ready to do our part when called on. I will assist you as we get to each step and make the requests needed at that time. I will outline a general workflow here that you can follow along with. Once we have had a general discussion and I’ve determined your needs, please start the process by completing step #1 below.
Application – pre-approval process
- What I will need you to do first.
- Provide everything from the list on page 2 and upload to Sharefile or Roostify per my instructions
- Fill out the online application at – Contact me.
- Be ready for my call to collect payment over the phone for credit report of $12-25 depending on borrowers.
- What happens with your loan file next – conditional approval by computer then later formal by human?
- It will be analyzed by myself and processing to prepare for an automated underwriting software pre-approval. If the information provided is correct and no guidelines have changed, it will create a preliminary conditional approval for the human underwriter to go off of once we get to that stage. This computer approval is often needed prior to signing around a final offer for a purchase. When doing a refinance, it’s helpful to determine what things the lender will allow and what other items will be needed. The conditional approval sometimes gives additional instruction that will be needed.
- The human underwriter will add or subtract conditions once they see the file. (Generally add, and that’s why we give them what we give them…we don’t want to do something that will trigger the need for more things) The human underwriter doesn’t see the file until we have (purchase and sale if a purchase) title, appraisal, and any other conditions from the DU automated system. (The efficiency is to have the computer do as much work as possible and the human the least but be the quality control, to reduce costs.)
- Once the human underwritten conditional approval is issued, we need to get exactly what they ask for. In some cases that’s impossible so I will work with you on what’s ok to substitute. Also, time is of the essence because if you take a day to get it to me…the underwriter may put it back in line behind all the files and won’t see it again for several more days. It’s on a first come first serve basis…some days they get 5 new files and some days 105! This is what causes the time line issue of how many hours in underwriting.
- Getting ready for loan documents –
- There could be a lot of back and forth at this stage while underwriting signs off on a number of things from each department so be available by phone, text, etc. for the next steps leading to your loan documents going over to escrow.
- One of those things will be contingency removal on purchases. I will go into more detail with you on this if it applies.
- The interest rate lock- In the days of old, we locked when rates were good and we could predict a timeline for closing. There is a lot more pressure on banks to deliver the loans now so most have a policy of not allowing locks until we are past this stage of the loan approval process and are just about ready to issue documents. I will be carefully watching rates and keep you up to speed on when that will occur. If we have time in the purchase and sale to wait for rate improvement then we can but it’s not recommended. On refinances we have more control. Once this part is done…then the clock is running so we have go to hurry or it will cost you money…in rate or fee, possibly both if the lock expires.
- Escrow- signing and then waiting for funding. At this stage, I have very little control and we have to wait for the folks in the process to do their part of the job.
- Escrow gets the documents from the lender…the last step in the closing process. You will get an email that needs to be acknowledged just when the lender is preparing the final documents to go over to escrow so be aware, watching email, and close to your phone.
- Escrow will call and schedule your appointment for signing. Often within hours of getting the documents but ideal a day before. You will have time to review your HUD settlement statement and have 3 day right of recession on owner occupied refinances. On purchases, not so much because everyone is usually pushing for an early close. Things are done last minute and in a rush…like herding cats!
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- Signing- This is almost the last step. Once you have signed at escrow, be available by phone or email incase a page or two is missing a signature which is often the case, or something else is needed by the pre-funding auditor….that day and the next day or two until it funds. (officially closes) SIGNING AND FUNDING ARE DIFFERENT DAYS…MEANING YOU CLOSE A DAY OR SO AFTER YOU SIGN.
- You may do your wire transfer for your funds to close the day of or after signing but be aware that your bank will need days for the funds to arrive, some take 3 some take 1. Call ahead and find out.
- The funding wire cut off time for the new loan is usually sometime between 11:00 a.m. to 3:00 pm depending on the lender. At funding, the old loan is paid, all loan funds are disbursed per the escrow instructions of who to pay. Then the final step is the county recorder will record the new lien holder. They usually do this close to 5:00 pm the same day. The loan is essentially complete at the funding step but some real estate agents get nervous and won’t give keys over until recording.
- Recording is also the magic time when you’re officially the new home owner (or your refinance is complete) and your insurance goes into effect. Congratulations!
- You’ll want to locate the letter from the lender with instructions for first payment. The coupon book or statements may come in 6-8 weeks after the loan closes unless you set up automatic payment.G. DO NOT SCHEDULE YOUR MOVING TRUCK UNTIL YOU AND I SPEAK! You made it! Just think…you do this once in a 5 or 10 year time window….I do it all day long every day. :} And I love helping you make your dreams come true. I apologize if I over or under explain things. I’ve been in the lending industry for nearly 25 years now so it’s pretty automatic for me. I will absorb most of the stress and aggravation so you don’t have to. I’ll keep you up to date on what you need to know and when you need to know… so we aren’t going in circles. Thank you again and I look forward to staying in touch with you throughout the next several years. I’m always just a call, text or email away and I love hearing from you. Thank you also for your referrals. I pride myself on being available to you at all hours of the day or night while you are going through this rigorous process so I spend less time with strangers and more time with those you and I care about. Thank you again! Stay in touch! Adrean J. Rudie Visit my blog at “ajrfinancial.com”