The Loan Process…and how it works



The Loan Process…and how it works!

A Four-Phase Process

Get Pre-Approval: By getting pre-approved for a loan, you will know exactly how much you qualify for and have the “certificate” from us to show any home seller that you have the “cash” to back up your negotiations.

Processing Phase

❑ Credit Report Ordered

❑ Assigned to Loan Processor

❑ Forms to Employers

❑ Forms to Banks

❑ Appraisal Ordered

❑ Document Confirmation

❑ Submit for FINAL Approval

❑ Approved!

Underwriting Phase

❑ Your complete file is sent to an Underwriter

❑ Underwriter is employed by the Lender

❑ Objective review of your file and all original documents

❑ Compliance with guidelines

❑ 3 day turnaround

Closing Phase

❑ Closing package is prepared by the Lender

❑ Orders survey

❑ Anticipate that Title Company will require certified funds

❑ Your Title Company is responsible for most of the events leading to closing

❑ Researches quality of title

❑ Orders Title Insurance

❑ Disburses funds

Mortgage Basics

Most contracts for purchase of real estate are contingent on the buyer’s ability to secure a mortgage. Knowing how much money you can afford to borrow and what it means to borrow money on a long-term basis are important considerations.

Obtaining an affordable mortgage depends on what you feel you can afford but, more importantly, on what a lending institution says you can afford. Before lenders will issue a commitment to lend large sums of money, they must be assured that the buyer can afford to repay the loan and that the value of property is sufficient collateral to guarantee repayment of the loan in case the borrower defaults.

Since financing is such a critical aspect of making an offer to purchase property, it is crucial to consult with a lender prior to beginning your search for the “right property.” Pre-qualification from a mortgage lender is a valuable tool to use in the home buying process. Give us a call at 512-329-9040 and we will be happy to discuss your financial needs with you.

The mortgage approval process can be divided into five very distinct parts: easily remembered with the acronym, A.L.I.C.E.

Assets – Cash available for down payment and closing costs

Liabilities – Financial obligations don’t exceed acceptable rations for housing and debt

Income – Your earning power, where it is coming from and how long it is likely to continue

Credit – Repayment has been timely and you aren’t over extended

Equity – The difference between the loan amount and value of the property

Supporting Representation:

Surveys

Home Inspections

Property Inspections

The Appraisal

Home Insurance

Title Insurance

Warranty Service

Attorney

Realtor®

Closing Costs & Interest Rates

Closing costs on your mortgage loan can vary widely between lenders. Mortgage closing costs are a mechanism which lenders use to improve their yield on loan origination. That is why we recommend that you compare the “bottom-line cost” of your loan, not just the interest rate. On any given day you can call 20 different lenders and you’ll find almost all are within 0.25%.

Because rates are so tight today everybody quotes virtually the same thing. The reason rates are so tight is that in this day and age of technology, everybody has access to essentially the same information.

The only way to accurately compare your mortgage loan is with a written “Good Faith Estimate”. We have included one for your review.

Our goal is to provide you with the most competitive pricing possible as well as the best mortgage experience – second to none!

❑ For many of our clients, we get you “Full Credit Approval” before they have found their home.

❑ The advantages are:

o Equivalent of shopping with cash

o Increased negotiating power

o Peace of mind

Choosing the Loan Program

Which loan is best for you?

❑ Conventional

❑ FHA

❑ VA

❑ Interest Only

❑ Pay Option

❑ Tax Deferred Investment

❑ No Doc

❑ Independent Contractor

❑ Non-owner Occupied

❑ ARM

❑ Buydowns

❑ First Time Homebuyer

There are numerous types of loan programs available. W R Starkey will research the best type for your specific financial needs. Call 512-329-9040 to discuss your financial needs with a licensed loan officer and mortgage consultant. We’ll do the research to get you the best loan program available.

Mortgage Timeline

Pre-purchase: Realtor® and buyer begin search for home. Buyer chooses lender and may request pre-approval of their loan.

Days 1-5: Application – The buyer becomes the “borrow” and completes the loan application including:

- Employers name and addresses for past 3 years.

- Information on Financial Institutions for all debts.

- Residency addresses for past 2 years,

- See items to bring on mortgage application.

Days 3-10: Opening the File – Lender orders property appraisal and credit report, mails verifications of employment and deposits, awaits replies.

Days 5-25: Processing – Credit report reviewed; debt and payment history verified; appraisal reviewed.

Days 15-25: Lender Underwriting – Underwriter review of entire package. If any questions, it is extremely important for the borrower to respond immediately.

Days 17-27 Pre-Closing – When the loan is approved:

- Title Insurance is ordered.

- Approval conditions are met.

- Closing is scheduled by Title Company.

- Borrower orders Homeowners Insurance.

Days 25-45: Closing Occurs

- Borrower obtains loan proceeds.

- Borrower presents certified check to cover balance of down payment

closing costs (see Good Faith Estimate).

- Loan Closes

- Funding

Important Phone Numbers

|W R Starkey |Licensed Loan Officer/Loan Coordinator Direct Lines: |

|1705 S. Capital of TX Hwy. Suite 450 |Dana Markes: 512-306-6358 |

|Austin, Texas 78746 |Marsha Wiley: 512-306-6372 |

| |Austin Police Dept List of Helpful Phone Numbers |

| |Austin Police Department |

| |PO Box 689001 |

| |Austin, Texas 78768-9001 |

| | |

| |Helpful Phone Numbers |

| |Police Headquarters Main Switchboard 974-5000 |

| |Homicide tip line 477-3588 |

|[pic] |Robbery tip line 974-5092 |

| |Sex Crimes tip line 974-5095 |

| |Auto Theft tip line 974-5096 |

| |Abandoned Vehicle tip line 280-0075 |

| |North Substation 974-5500 |

| |East Substation 974-5900 |

| |South Substation 974-8200 |

| |Crime Stoppers 472-8477 |

| |Community Liaison Office 974-4700 |

| |Public Information Office 974-5017 |

| | |

| |Additional Numbers |

| |Graffiti Removal 854-4125 |

| |Jail Information 854-9889 |

| |Police Reports by Phone 974-5750 |

| |Purchase Police Reports 974-5212 |

| |Traffic Office 974-5789 |

| |Victims Services, Main Office 974-5037 |

| |Animal Cruelty 3-1-1 |

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