The Loan Process
The first step in obtaining a loan is to determine how much money you can borrow. In the case of buying a home, you should determine how much home you can afford even before you begin looking. By answering a few simple questions, we will calculate your buying power, based on standard lender guidelines.
Keep in mind that prequalification is nothing more than qualifying based on verbal confirmations of your information. In reality, true quotes on rate and terms could dramatically be affected if any of the elements in your prequalification weren’t aligned with what you verbally provided (with no fault of yours). You may also choose to get pre-approved for a loan which requires verification of your income, credit, assets, and liabilities. It is recommended that you get pre-approved before you start looking for your new house so you don’t waste your time and energy with surprises during escrow.
Keep in mind that prequalification is nothing more than qualifying based on verbal confirmations of your information. In reality, true quotes on rate and terms could dramatically be affected if any of the elements in your prequalification weren’t aligned with what you verbally provided (with no fault of yours). You may also choose to get pre-approved for a loan which requires verification of your income, credit, assets, and liabilities. It is recommended that you get pre-approved before you start looking for your new house so you don’t waste your time and energy with surprises during escrow.
Home loans come in many shapes and sizes. Deciding which loan makes the most sense for your financial situation and goals means understanding the benefits of each. Whether you are buying a home or refinancing, 1st time purchasing a home, or as your 6th investment property, the catalog of programs that you would qualify for can vary significantly. And each has different reasons you’d choose them.
Once you are presented with a full list of options by us, it’s critical to understand and have the correct expectations with the terms, rates, and other aspects of each of those options. Especially, we would like to have you only entertain the options that you fully understand and are comfortable with.
Although lenders conform to standards set by government agencies, loan approval guidelines vary depending on the terms of each loan. In general, approval is based on two factors: your ability and willingness to repay the loan and the value of the property.
When you agree with a loan option that you find most favorable to your financial goal and future, we will move to the next step. We will draft and submit your loan official application based on the terms and quote you want to move forward with.
When you agree with a loan option that you find most favorable to your financial goal and future, we will move to the next step. We will draft and submit your loan official application based on the terms and quote you want to move forward with.
Once your loan application has been received we will start the loan approval process immediately. Our loan processor will verify all of the information you have given. If any discrepancies are found, either the processor or your loan officer will troubleshoot to straighten them out. This information includes, but not excluded to:
- Income/Employment Check
- Credit Check
- Asset Evaluation
- Property Appraisal
- Other Documentation (If requested by the lender)
After your loan is approved, you are ready to sign the final loan documents. You must review the documents before signing and make sure that the interest rate and loan terms are what you were promised. Also, verify that the name and address on the loan documents are accurate. The signing normally takes place in front of a notary public.
There are also several fees associated with obtaining a mortgage and transferring property ownership which you will be expected to pay at closing. Bring a cashier’s check for the down payment and closing costs if required. Personal checks are normally not accepted. You also will need to show your homeowner’s insurance policy, and any other requirements such as flood insurance, plus proof of payment.
Your loan will normally close shortly after you have signed the loan documents. On owner-occupied refinance loan transactions federal law requires that you have 3 days to review the documents before your loan transaction can close.
There are also several fees associated with obtaining a mortgage and transferring property ownership which you will be expected to pay at closing. Bring a cashier’s check for the down payment and closing costs if required. Personal checks are normally not accepted. You also will need to show your homeowner’s insurance policy, and any other requirements such as flood insurance, plus proof of payment.
Your loan will normally close shortly after you have signed the loan documents. On owner-occupied refinance loan transactions federal law requires that you have 3 days to review the documents before your loan transaction can close.
Your process of securing a commercial real estate loan is all about understanding your financial potential, business plan, and the potential of the purchase (or purpose of refinance). Before you commit to a deal, spending money on inspection and appraisal, it’s essential to gauge how much financial leverage you can access based on the current industry market and lender guidelines. After meeting with us and providing a few important details, we can have a clearer picture of what you are trying to accomplish while having enough information to find and connect you to lenders with aligned proximity and core products that would most likely be interested in financing your venture.
As loan originators and intermediaries between you, the borrowers, and the lenders, we work on probability. A significant of our value comes from the industry knowledge and prior experience of what the lenders are looking for in potential borrowers, as well as understanding their credit box, core programs, and footprint (geographical lending map). All so that we can place our clients and their specific needs with the right loan and the highest probable Lender.
Once our loan officers do their assignment, looking for the most probable and best lenders for your particular capital and business needs, you will receive a Term Sheet and Lender Matrix Quotes that are particularly put together for your file and property. These lay out all the options and initiative quotes from the lenders that the loan officer has reached out to and deemed to be truly interested in lending on your deal. This is the time to confirm and negotiate with the lender if needed.
Once you’re ready to move forward, a loan application will be submitted and the loan officer will assist the borrower in collecting all the necessary documents such as P&L, tax returns, …to jump-start the process. Meanwhile, the lender will order the appraisal, environmental, and inspection reports.
While the loan officer and the borrowers work together to fulfill all the loan approval conditional items, a credit memo will be presented to the loan committee. Once all conditions have been satisfied, the lender’s loan committee will either approve the loan or provide a Commitment Letter.
Congratulations, this is the payoff moment of your patience, hard work, and cooperation. Once the Commitment Letter is issued, the borrower can sign and finalize the process. Bank loan documents will be drawn and the loan will be funded after a bit of additional administrative tasks.