Steps to buying your home…
Choosing the right loan program to match your unique situation can seem tricky, but we’re here to make it a breeze! One of the biggest factors is your debt-to-income ratio—that's just a fancy way of comparing your monthly income to your monthly bills.
If your credit needs a little tune-up, no worries! We've partnered with a top-notch credit repair expert and his team for over 5 years. They'll help you get everything in order so you can move forward with confidence. They are true magicians!
Ready to get started? The pre-approval process is quick and painless—just 10-15 minutes over the phone. Prefer to do it online? Click the “Get Pre-approved” link in the upper right corner of our site and fill out the application. We'll reach out to verify your info and tie up any loose ends.
We’ll also request a few documents to determine your maximum purchase price and send you an official preapproval letter. Then, you’ll be all set to start shopping for your dream home with your realtor! And rest easy, all your documents are securely protected in your personal portal.
Loan Process overview
pre-approval stage
Step 1
It all begins here. This stage provides your maximum purchase price based on your debt-to-income ratio. Once we receive your application and the documents needed to complete the review, we will send you the pre-approval letter within 24-48 hours so you can start searching and making offers. We perform a “soft credit pull” at this stage since it is truly a preliminary information gathering step for both yourself and us. Pulling a hard credit pull at this stage is not only unnecessary, but it drops your credit score every time it is pulled, which not only lowers your credit score but increases your interest rate and monthly payment. The credit report is only good for 120 days from the date it is pulled and if you are not planning to start making offers right away then your credit may need to be pulled again by the time you are truly ready.
gather documents
Step 2
Prior to receiving your pre-approval letter, we will collect certain documents from you. These documents are required once you find a property and are under contract with a confirmed closing date. The underwriter (the one who final approves your loan) requires these specific documents. Keep in mind the underwriter may request more documents when underwriting your loan, which will be communicated with you at that time. Bank statements are closely reviewed by the underwriter and any large deposits require an explanation. See the below downloadable document that explains how to send bank statements and what to watch out for before sending the bank statements for underwriting review. Being aware of the requirements now will save you time and stress.
loan estimate
Step 3
When you receive the pre-approval letter, that same email to you will include your down payment and estimated closing costs. We will not know any exact final numbers for your cash to close until you are under contract and we have a known title company who will be handling your closing. The closing costs come from the title company and their fees are added to your down payment to complete your final cash to close. Many people want to know the total funds to close right away, but every lender will only be able to provide an estimate until you are final approved in underwriting and your loan moves into the lender’s closing department to work with the title company to perform a process called “balancing the fees”. Once that is complete, we will have your final total cash to close. Up until that time you will instead receive a loan estimate with an estimate of the fees. This estimate is ALWAYS going to be higher than what your actual final fees will be and the reason it is is due to a federal requirement that the lender pay those fees on your behalf if it is “under-disclosed”. Therefore to prevent this from happening, all lenders will “over-disclose” your final fees. You will then see certain line items disappear that were previously disclosed, or they will decrease to the actual fee. Again, this balancing process happens once you are finally approved in underwriting and your loan moves to the closing department of the lender.
property search
Step 4
By this point you will have received your pre-approval letter which allows you start making offers on properties. If you need any assistance during this timeframe that you’re searching for homes and would like to know estimated monthly payments you can text or email the home address and we will get right back to you with those details. Once you find a home and your offer has been accepted, you will be “under contract” at that point. You or your real estate agent can forward us the contract and we will get your loan processed and final approved by the underwriter so that you are closing by your contract closing date. Besides the appraisal fee, you will need to put an agreed amount (usually a minimum of $1,000) in an escrow account that basically proves as “good faith” to the seller that you are buying the property and they can take it off the market. The escrow account is established by a title company, which is usually listed on the first page of the purchase agreement/contract. You will then take the agreed escrow deposit to the title company. The amount you put into this escrow account is deducted from your final total closing costs on the day of your closing.
Appraisal order
Step 5
Once you are under contract on your new property we will need to order a property appraisal. We will send you a credit card payment link to complete the payment, or you can provide your card information and we will manually order the appraisal for you. The cost for the appraisal will range from $500.00 - $875.00, depending on the loan and property type. Most appraisals for a single family residence range from $500.00 - $625.00. The appraisal not only provides the lender with the market value of the property, but it also serves as a guide to let you know whether the purchase price was above or below in value. If the appraisal report comes back higher than your agreed sales price, then you have automatic equity in the home and you can refinance the home at any time to make improvements or pay down debt, or go on a vacation. If the value comes back lower, then you and the seller have an option to either lower the contract price to the appraised value, or you would agree with the seller to pay them the extra amount to match the lender’s approved loan amount. The lender will not finance a loan amount that is reporting of lesser value than the appraised value. For instance, the contract price is $400,000 and the appraised value comes back at $350,000, you can re-negotiate with the seller to drop the price to match the appraised value of $350,000, which would obviously be in the buyer’s best interest, or the seller will not agree and you would then need to either pay the $50,000 out-of-pocket at closing, or agree to cancel the contract, and search for a new property. In the same example, if the appraised value comes back at $420,000, then you have $20,000 equity in the property and can eventually do a cash-out refinance to pull the money out of the home in order to do whatever you need the money for, as mentioned above. However, the contract price does not increase from $400,000 to $420,000 as a result of the appraised value of $420,000.
Initial Underwriting Approval
Step 6
Once we send your loan file into the underwriting department, you will hear back from us within 48 hours with the underwriter’s approval details (we call them “conditions”). The underwriter will give you the initial approval and request “conditions” to fulfill their “needs list”. We will give you these conditions once received, and prefer that you provide the documents requested within 24 hours. Once all conditions are re-submitted to underwriting they will issue the final approval so you may close on your loan and receive the keys to your new property.