What to expect when you apply for a home loan:

What to expect when you apply for a home loan:

The Mortgage application should take approximately 15 - 20 minutes to complete. Once you have submitted your application, one of our mortgage specialists will contact you within one business day to discuss your needs and help you select the mortgage that suits both your budget and lifestyle.

IMPORTANT INFORMATION ABOUT PROCEDURES
FOR OPENING A NEW ACCOUNT

To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person or entity that opens an account.

What this means for you: If you open a personal account, we will ask for your name, address, taxpayer identification number, date of birth, and other information that will allow us to identify you. Additionally, we will take certain steps to verify your identity, such as asking for your driver's license or other identifying documents or checking other sources. Similar identification requirements apply to non-personal accounts such as corporations and partnerships. Be assured that we recognize the importance of protecting your privacy and safeguarding the confidentiality of the information you provide to us.

What Information You'll Need:

To apply for an SNMC mortgage, please have the following information at hand:

* Social Security Number or Tax Identification Number
* Date of birth
* Mother's maiden name
* Address history for the past two years
* Current e-mail address
* Annual income and employment information
* Current month's paystub(s) for the borrower and co-borrower (if applicable)
* Last two year's W-2 forms
* Monthly costs you pay for current housing, including rent, mortgage(s), taxes, insurance and association dues
* Last two year's tax returns with all schedules and YTD Profit and Loss Statement if you are self-employed or paid on commission, or if more than 25% of your monthly income comes from bonuses or overtime
* Last two month's full bank statements (not just summary pages) as well as any other asset accounts you wish us to consider
* The Deed, if you are refinancing
* The Sales Contract, if you are buying a property
* Outstanding liens, monthly insurance and tax amount, market value and income generated on any other property you may own, such as rental property

As part of the verification process, you may be asked to provide us with copies of the items listed above.

Once the application has been submitted, you may be asked to provide the following additional documents, if applicable:

* Canceled checks showing your mortgage payments over the last 12 months, OR your rent payments over the last 6 months
* If a Veteran, your VA Certificate of Eligibility, or DD214


What You Should Know:

* Fees associated with your application:
Fees associated with closing (or settlement of) your loan will be provided on a Good Faith Estimate which will be sent to you upon receipt of your application
* Once you have submitted your application, we will mail you disclosures and a paper application for signature within 3 business days. You will need to review, sign and return those documents to us to continue processing your application


Questions:

If you need assistance or have questions about the application, please contact us or call 1-888-584-4248.

Security:

Learn more about our site's security features, because securing your information is important to us.

APPLYING FOR A MORTGAGE

With all of the paperwork and questions that you need to answer, applying for a mortgage can be stressful. But knowing what's involved in the process can make things a lot easier. Here's some information to get you started.

Before you apply

Do some homework before you apply for a mortgage. Think about what type of home you want, what your budget will allow, and what type of mortgage you might seek. Get a copy of your credit report, and make sure it's accurate; dispute any erroneous information to get it corrected. Be prepared to answer any questions that a lender might have of you, and be open and straightforward about your circumstances.

What you'll need when you apply

When you apply for a mortgage, the lender will want a lot of information about you (and, at some point, about the house you'll buy) to determine your loan eligibility. Here's what you'll need to provide:

* The name and address of your bank, your account numbers, and statements for the past three months
* Investment statements for the past three months
* Pay stubs, W-2 withholding forms, or other proof of employment and income
* Balance sheets and tax returns, if you're self-employed
* Information on consumer debt (account numbers and amounts due)
* Divorce settlement papers, if applicable

You'll sign authorizations that allow the lender to verify your income and bank accounts, and to obtain a copy of your credit report. If you've already made an offer on a house or condo, you'll need to give the lender a purchase contract and a receipt for any good-faith deposit that you might have given the seller.

Prequalification and preapproval

In many cases, you'll want to know how much mortgage you can get before you look at homes so you won't waste time drooling over places that you can't afford. Your potential lender can either prequalify you or preapprove you for a mortgage.

Lenders use several standard ratios to determine how much mortgage you're eligible for. Generally, your monthly housing expenses (mortgage principal and interest, real estate taxes, and homeowners insurance) should not exceed 25 to 30 percent of your gross monthly income. In addition, your total long-term debt (monthly housing expenses plus other debt payments that won't be repaid within a year) should be no more than 33 to 38 percent of your gross monthly income.

Prequalifying for a mortgage is simply a matter of a lender crunching these numbers to tell you how large a mortgage you'll qualify for based on those ratios. Remember, what you qualify for may not be what you can afford--only you can determine that after examining your own budget and lifestyle. Because the lender has not verified your income or examined your credit report, prequalification promises you nothing; it simply tells you how much mortgage you might get.

Preapproval, however, means that the lender has checked out your income and credit. You'll get a letter of commitment stating that you'll be given a mortgage up to a certain amount. Preapproval lets you know exactly how large a mortgage you can get. In addition, it gives you more credibility as a buyer, since a seller can see in the lender's letter that you're going to get the mortgage if he or she accepts your purchase offer.

Finalizing the application

As your mortgage application is processed and finalized, your lender is required by law to give you several documents. Within three business days of applying for the loan, the lender must inform you of the mortgage's effective rate of interest, or annual percentage rate (APR). If relevant, the lender must also give you consumer information on adjustable rate mortgages. In addition, the lender is required to give you an itemized good-faith estimate of your closing costs and a government publication that explains those costs.

Since the home that you're purchasing will serve as collateral for the loan, the lender will order a market value appraisal of the property. The lender will not lend you more than a certain percentage of the value of the property. If your down payment will be less than 20 percent of the value of the property, your loan will require private mortgage insurance, and the lender will obtain insurer approval. If the lender has not already done so as part of a preapproval process, it will verify your employment and bank accounts as well as obtain and evaluate your credit report.

For financial advice tailored to your situation, please contact an expert such as a CPA or a personal financial advisor.

It all begins when you find THE house and make a sound offer based on your budget and pre-qualification amount. Once the offer is accepted, the mortgage process begins. To help you understand every step, we'll cover information about the loan application and decision points throughout the entire process.
Gather Your Information

Typically when you apply for a mortgage, you'll be asked to complete a Uniform Residential Loan Application. This standard residential mortgage loan application is a four-page document that asks in-depth questions about you, your income, your assets and liabilities, and your credit as well as a description of the property. Although it can vary slightly depending on the type of loan, lenders usually require the following information and documentation:

* A driver's license or picture ID
* Your Social Security card(s)
* Home and business telephone numbers
* The name and address of your nearest relative (for VA mortgage)
* The name, address and phone number of your current landlord or mortgage company and the amount of monthly payment (if you've been at present address for less than 2 years, you'll also need this for previous landlords and/or lenders)
* Employment information including your employer's name, address, phone number, length of employment, position and salary (if you've been with the same employer for less than two years, you'll need this information from previous employers)
* Current pay stubs (not more than 30 days old) and copies of your W-2 forms for the last 2 years; if self-employed or commissioned, you'll need signed tax returns for the last 2 years plus a year-to-date income statement and balance sheet
* Written verification of other income you need to qualify for the loan (e.g. retirement or rental income); you are not required to reveal alimony, child support, or separate maintenance unless you want it to be considered
* Detailed accounting of your assets
o Cash on hand
o Bank accounts
o Name and address of your financial institution(s), account numbers, balances, name in which the account is listed and the three most recent statements for each deposit account
o Investments (stocks, bonds, annuities, mutual funds, etc.)
o Investment breakdown, values and copies of the last three statements
o Automobile(s) make, model and value
o Estimated household and personal property value
o Real estate description, value, lender's name and address, account number, plus information on any outstanding claim to the property (for example, if it has been used as collateral on another loan, or is currently mortgaged, etc.)
o Life insurance
o Amount of coverage and cash value
o Other assets such as boats, campers, etc. and their value
* Detailed accounting of your liabilities
o Current and recently paid off accounts such as auto loans, loans from banks, finance companies and charge cards; include name, address, account number, monthly payment and balance, or line of credit
o Child support or alimony, if applicable, document the amount and duration of obligation
o Present and previous mortgage loans, including name, address, loan number, type of loan (Conventional, FHA, VA, or FmHA), original loan amount, present balance, monthly payment and intent to sell or rent; if a previous mortgage, date loan was disposed
o Child care expenses (FHA/VA only)
o Bankruptcies, liens and judgements with written explanations and copies of discharges
* A copy of your DD214 or Original Certificate of Eligibility (for VA mortgage)
* Your ratified sales contract
* A legal description of the property you wish to purchase
* Name, address and phone of the title company you wish to use
* Name, address and phone number of the attorney you wish to use for closing
* A voided check or deposit slip if you desire to have your mortgage payment automatically withdrawn from your checking account

Choose a Mortgage

In addition to providing your financial history, you'll also need to tell the lender what type of mortgage loan you're interested in. In addition to conventional, fixed, or adjustable rate (ARM) mortgages; there are also FHA Insured and VA loans, Rural Housing and AHP loans, as well as many others. Learn about the types of mortgages available to you before you apply for your loan or even before you start house-hunting. Your mortgage will directly affect how much house you can afford and the amount of your monthly payments.
Decide How Much to Borrow

Again, this is a decision you most likely will have made before the loan application. Your requested mortgage amount will be based on the purchase price of your new home and the amount of money you will be putting toward a down payment. Before actually applying for a loan, many borrowers find out how much they can afford by getting pre-qualified by a mortgage lender.
Calculate Your Down Payment

Some loan programs offer 3% down payments if you meet certain income standards, and the Veterans Administration (VA) and the Rural Housing Service (RHS) offer no-down-payment loans. Usually home buyers are expected to make a down payment of at least 5-10% of the value of the home. However, if you put down less than 20% on a conventional loan, most lenders will require you to carry private mortgage insurance.
Choose a Closing Date

Your sales contract will specify a time frame in which you wish to close on your new home (usually 30, 45, or 60 days from the time you have a ratified sales contract). When you apply for your loan, be sure and tell your loan officer the approximate date you would like to close so that loan processing can coincide with your wishes. Learn more about what to expect on closing day.
Lock-In an Interest Rate

Interest rates fluctuate frequently, and they may even increase between the day you apply for your mortgage and when you actually close on your home. That's why many lenders offer a rate lock-in, which guarantees a rate for a set period of time. If you opt for a lock-in, make sure the expected closing date is well within the lock-in period. Ask the lender if the rate can be locked in at the time of application or only at loan approval, how long it remains in effect, whether there is an additional charge, and if you can also lock in points.

Get All The Required Information

Legally, your lender is required to furnish you with several types of documents and information in conjunction with your application for a mortgage loan, including:
Truth-in-Lending (TIL) Statement

The lender must provide you with this document within three business days of applying for a home loan. The TIL statement outlines the estimated costs of your loan, including the annual percentage rate (APR) and other terms, including points, any other finance charges, the amount financed, the payment amount and the total payments required. Because it's possible that the APR and closing costs calculated at the time of your loan application will change at the actual closing, your lender is required to give you the final version of your TIL statement at or prior to your closing meeting.
Disclosure About ARMs

Federal law requires your lender to give you disclosure information about an adjustable rate mortgage (ARM) either when you receive an application form or when you pay a non-refundable fee—whichever comes first. Your lender should provide you with a written summary of the important terms and costs of the loan, the past performance of the index to which the interest rate will be tied, and a copy of the booklet “Consumer Handbook on Adjustable-Rate Mortgages,” published by the Federal Reserve Board.
Good-Faith Estimate

Within three days after you have submitted your application, the lender is required by federal law to provide you with an itemized estimate of the costs to close (or settle) the loan. This report is referred to as a "good-faith estimate." It's a ballpark estimate of how much money you will need to pay at the closing along with the seller's costs. Costs can and will vary from the actual amounts indicated, so be sure to take this for what it is—an estimate.
Guide to Settlement Costs

The lender must also give you a copy of the government publication, “Settlement Costs: A HUD Guide.” This publication describes the settlement process, the nature of charges and your rights, and it also includes an item-by-item explanation of settlement services and costs. The lender has three business days after receiving your written application to give you this guide.
Understand Your Legal Rights

You may be asked to sign several authorization forms that will allow your lender to verify the information on your application. These include the authorization to investigate credit, verify your employment, look into your past rental or mortgage payment history, even review bank deposits.

When compiling a credit profile of you, your lender must certify that the credit report will only be used for the purpose of qualifying you for a mortgage loan. As part of the credit evaluation process, your lender cannot seek any subjective information from your neighbors or co-workers concerning your character, reputation, or other personal aspects unless you receive notice. These limitations are set by the Fair Credit Reporting Act.

Under the Equal Credit Opportunity Act, a lender cannot discriminate based on race, color, national origin, sex, marital status, age, religion, and the fact that all or part of your income comes from a public assistance program, and your exercise of any rights under the Consumer Credit Protection Act. Your lender also cannot ask questions about your future parenting plans, although the lender may ask about the current number of children you have and their ages. In addition, a lender is prohibited by law from asking questions concerning the applicant's spouse unless the spouse is contractually liable, the spouse's income will be relied on to repay the debt, the applicants live in a community property state or the applicant plans to use child support, alimony or separate maintenance payments from a spouse or former spouse to repay the debt.