The Mortgage Loan Process

The Mortgage Loan Process - The first step in the mortgage process is usually to apply for a loan. You may also have preliminary discussions with the mortgage professional to determine whether or not they can help you with your loan. At any rate, the process can not begin until you have filled out and signed a mortgage application and the appropriate disclosures.

The basic process of trying to obtain a mortgage is application and disclosure of all applicable information, processing your loan application, an underwriter underwriting your loan, loan approval, and then the closing of your loan. Each step mentioned here has certain criteria and procedures that are done and completed to finish each step.

One thing that will help in the process, is to quickly supply your mortgage professional with whatever documentation he or she asks you for at each stage of the loan process. This helps the loan finish faster, and with less frustration, as well as it will often times save the borrower money.

From that point you will be asked to provide a lot of personal documentation, such as paystubs, w2's, bank statements etc. Make sure you provide all pages of the requested items to expedite your loan.

If asked for paystubs or bank statements, make sure you provide the most recent ones available.

If you find that documenting your income will be a problem you should ask your preferred mortgage professional about a Stated Income, Reduced Documentation, or No Ratio mortgage.
These loans generally require high FICO credit scores and a good employment history.

Lease-to-own purchase - "What is a lease-to-own purchase? And how does it work?"

Use a land contract instead and do as a refi 12 months after moving in. Make sure all utilities are in the clients name as well as having cancelled checks or money orders to support rental history.

Although some what risky for the borrowers a lease option purchase is a great way for borrowers with slight credit issues to get into a home of their own.

Lending guidelines differ between lenders so make sure the lease purchase agreement is underwriter friendly. Have a lender underwriter review the agreement before you sign.

If you plan on using a lease-purchase for your next home it is important to obtain the aid of a knowledgeable and trustworthy attorney. Taking precautions to protect your equity investment costs a little more upfront but will provide peace of mind and security until you are ready to purchase.

Once you have found the home that you are going to Lease Purchase, it is a good idea to start talkign with a mortgage professional. They can guide you down the road that will lead you to purchasing the home when the lease purchase term is up.

A lease-to-own or rent-to-own purchase is often used when a buyer cannot qualify for a mortgage, but has found the home they want to buy.

The buyer will sign a contract with the seller that specifys things like how much of the buyer's monthly rent payment is going towards a downpayment for the home and how long the buyer has to secure financing.

When entering into a lease-to-own agreement, it is important to read the contract thoroughly and make sure you understand the terms. It is also important to make sure that you make your payments by check every month. Most lenders will want to see cancelled rent checks to make sure you've been making your payments on time.

After you have entered into a lease-to-own agreement, it is important to actively try to improve your credit score. Don't expect things to get better on their own. A mortgage professional can guide you in the steps you need to take.

Remember, if you don't qualify for financing when your lease-to-own agreement ends, you may find yourself looking for a new place to live.

If you don't qualify for the loan at the end of the lease period and have to find a place to live, chances are you'll also lose your downpayment that you've been putting in monthly.

Most lease to own agreements do not credit dollars paid during the lease to the purchase of the home, however, some homeowners may be willing to credit those dollars and negotiate that stipulation into the agreement if the home is purchased prior to the expiration of the agreement.

If your lease is properly structured and meets certain guidelines, some lenders allow the property to be refinanced in the lessee's name by using the lease's selling amount as opposed to the new appraisal.

Dont let what you hear on the news scare you - Anything you may hear on the evening on 24hr news service in regard to the housing market is a broad brushed generalization and you shouldnt be but so alarmed until you research your market.

Each market does one of three things:
- property values are going up
- property values are going down
- property values are staying the same

Finding out whats going on in your market can help you make a more informed decision on whether its the best to refinance, purchase or sell your home now...

Even in a local market different areas may behave differently. Your local Mortgage Professional and your local Realtor will be able to help you determine which areas are appreciating and which areas may be declining. In general, it is better to buy in an area that is appresiating even if you pay a little more because your future value will be greater.

One way to track the market is to look at a 60 or 90 day moving average of the 10 year US bonds. Since mortgage rates are based on bonds, the moving average will give you the best view of where rates are trending.

Often times the news reflects what's going on nationally, but your state, county, and/or city may not reflect what's happening nationally.