Your Consumer Direct Branch Loan Consultant can help sort out your refinancing options to best fit your goals, whether you want a lower interest rate, to pay off other debts, to make home renovations or to change the term of your loan.
Gather Documents. You will need to bring a few pieces of information with you to your initial consultation. Click here for a list of these documents and have them ready for your Loan Consultant.
Application. The initial meeting can be done over the phone, in person, or by submitting the electronic loan application. We recommend that first-time clients come into the office so we can better guide you through the process. Based on the information gathered for the application, the Loan Consultant can determine what options are available to you.
Credit Check. Lenders like to look at a potential borrower’s credit history and get credit/FICO scores from major credit bureaus (TransUnion, Experiean, and Equifax). This helps the lender to make a more informed decision regarding loan qualification.
The FICO score represents the statistical summary of data contained within the credit report. It includes bill payment history and the number of outstanding debts in comparison to the borrower’s income. The higher a borrower’s credit score, the easier it is to obtain a loan or to pre-qualify for a mortgage.
If the borrower routinely pays bills late, then a lower credit score is expected. A lower score may persuade the lender to reject the application, require a large down payment, or assess a high interest rate in order to reduce the risk they are taking on the borrower. In instances where your FICO score needs improvement before continuing on with the loan process, we can help to raise your score and get you back on the path to obtaining your financing goals.
Qualifying. After basic calculations have been done and a financial statement has been completed, the borrower has qualified for a refinance based on credit history and income. Qualifying lets the borrower know exactly how much money can be borrowed.
There are two basic ratios that lenders use to determine a loan amount for their borrowers.
Ratio #1: The borrower’s total monthly housing costs compared to their total monthly income.
• The borrower should write down, before deductions, the total gross amount received per month. • The number in step 1 should be multiplied by .28. This is what most lenders will use as a guide to what the total housing costs are for the borrower. Depending on the percentage, a higher percentage may be used.
Ratio #2: The borrower’s debt to income
• The borrower should write down all monthly payments that extend beyond 11 months into the future. These can be installment loans, car loans, credit card payments, etc. • The total number in the first step should be multiplied by .35. Total monthly debt should not exceed the resulting number.
Your loan officer will give you an idea of the costs associated with your loan and your monthly payments by giving you a copy of your Loan Estimate and discussing it with you. This will allow you to look at your overall budget and make sure you refinance at a price you can afford.
Ask questions! We are here to help. Visit our FAQ for some common inquiries.
This is a brief outline on how the refinancing process works. Each and every loan is different and you may find that your process works a little differently. Not to worry, we will be with you every step of the way. We can explain anything that is confusing.
For more information on the terms used in this outline see our Loan Lingo page.
Loan Package. After your appointment with a Loan Consultant, your loan is given to a Production Assistant, who will run automated underwriting approvals, verify employment, order an appraisal, order escrow, order title information, and prepare the loan package. At this time your loan package will be ready for signatures.
In Processing. Once your loan has been entered into the computer system, it is then given to a Loan Processor. The loan processor compiles all the necessary information and paperwork needed to finalize your loan for submission (i.e. credit report, appraisal, escrow instructions, and title report).
Submitted to Underwriting. After all of these items are received, your loan is then submitted to an underwriter. The underwriter is the person who takes all the information provided and validates that the input on the original application was accurate. Once the validation is complete, final loan approval with conditions is then issued.
Loan Approval. As part of your loan approval, you may be asked to provide additional information to the underwriter. Once all of these items have been received and "signed-off" by the underwriter, we then order your loan documents.
Loan Documents. After the loan documents have been drawn, they require signatures and notarizing which is normally completed at your escrow company. If that is inconvenient, we can arrange for you to sign them at our office, your home or your office.
Review and Funding. After signing, loan documents are returned to the funding department to be reviewed and to prepare the loan for funding. Once the loan has funded, it is then recorded. Once the recording by the County Recorder's office has taken place, your loan has been completed. You will receive a letter letting you know where to make your first mortgage payment.
Remember that homeownership will help you and your family maintain financial stability and build wealth over time. Feel accomplished in your investment. Keep in touch with us even after the loan process is over. We are happy to answer any questions! If you are looking to make renovations to your home, please visit our Referral List for some of the trusted professionals we work with. It is a good idea to look at your home financing options every few years. When rates are low or when your financial plans change, refinancing can often be a tool to help you reach other financial goals. Give us a call to discuss financing options at any time.