Here’s what you can expect from Capstar Mortgage.
1. Mortgage Pre-Approval
A loan pre-approval sets you up for a smooth home buying experience. The best way to approach a real estate agent and start shopping is with a lender pre-approval in hand that proves you’re ready and able to buy. Pre-approvals are relatively simple and involve pulling your credit score and credit history. Within the credit report, a lender can see your payment history and past and present lines of credit. With this information, Capstar Mortgage will determine a loan amount for which you will qualify. This pre-approval will save you a lot of time since you will be able to focus exclusively on houses in your price range. Mortgage pre-approvals also signal to the seller that you’re a serious buyer. Sellers prefer a buyer who is pre-approved.
Mortgage pre-qualification is not the same as pre-approval, and it’s important to know the difference. A pre-qualification is a less meaningful measure of a person’s actual ability to get a loan. And is usually determined by a loan officer asking a potential borrower a few basic questions without third-party verification. While the conversation with a loan officer can be helpful for other reasons, there’s no tangible result that proves anything to anyone (like to your real estate agent or a seller).
2. House Shopping
You may have already started shopping online via real estate portals like Zillow, Trulia or Redfin, and working with a Realtor.
Although online shopping is fun and can be informative, the Multiple Listing Services (MLS) used by real estate agents reflect the most up-to-date inventory and pricing. Also, agents may know about homes that are coming on the market before the listings are made public.
Once you find something you like, your agent will make an offer on your behalf.Mortgage Loan Application Process
3. Applying for a Mortgage
We’ll collect documents to get your loan file through underwriting, both online or over the phone. While the list looks long, it won’t take much effort on your part. Your loan officer will tell you what is needed and help you prioritize which items to send in first.
• Name of current employer, phone and street address
• Length of time at current employer
• Salary including overtime, bonuses or commissions
• Two years of W-2s
• Profit & Loss statement, if self-employed
• Pensions, Social Security
• Public assistance
• Child support
• Bank accounts (savings, checking, brokerage accounts)
• Real property
• Investments (stocks, bonds, retirement accounts)
• Proceeds from sale of current home
• Gifted funds from relatives (e.g. down payment gift for FHA loan)
• Current mortgage
• Child support
• Car loans
• Credit cards
• Real property
• Street address
• Expected sales price
• Type of home (single family residence, condo, etc.)
• Size of property
• Real estate taxes (annual)
• Homeowner’s association dues (HOA)
• Estimated closing date
Financial Blemishes We will help prepare documentation for the lender that will explain problem credit areas.
Type of Mortgage
• Fixed or adjustable
• Forward or reverse
• Government insured: VA, FHA, USDA
VA Certificate of Eligibility (COE)
If you are applying for a VA loan you will need proof of your military service. Your lender will be able to pull it for you.
4. Loan Estimate
With the information above, Capstar will create a Loan Estimate that will describe terms and predict costs associated with your loan. The Loan Estimate includes closing costs, the interest rate and monthly payments (principal, interest, taxes and insurance). A notification is included if interest rates can change in the future, as would be the case with Adjustable Rate Loans (ARMs). It also includes information about any special features such as pre-payment penalties or negative amortization.
5. Mortgage Loan Processing
Loan processors review all information in the loan file and assemble an orderly and complete package for the underwriter. They’ll open the file and:
• Order credit report (if not already pulled for a pre-approval)
• Start verifying employment (VOE) and bank deposits (VOD)
• Order property inspection if required
• Order property appraisal
• Order title search
6. Mortgage Loan Underwriting
The underwriter is the key decision-maker, who will approve or reject the loan by evaluating all the documentation prepared by the loan processor, cross checking to make sure the borrower and property match the eligibility requirements of the loan product for which the borrower applied. They will review the borrower’s credit history and their capacity to repay the loan, collateral, and verify information.
7. Lock Interest Rate
After initial approval and before closing, your loan officer will recommend when to lock your loan interest rate. Rates vary every day that bond markets are open.
8. Mortgage Closing
Loan documents are drawn, meaning they are printed out and sent to the title company where the closing meeting takes place..One of the documents is the Closing Disclosure, which confirms costs presented earlier.
9. Three-Day Review
You have the right to review the Closing Disclosure three days prior to the closing meeting.
10. Final Walk-Through
Many buyers schedule a final walk-through of property 24 hours before the closing meeting to ensure the seller has vacated property and that required repairs are complete.
11. Closing Meeting
You’ll sign lots of documents and complete your purchase or refinance. You’ll need two official forms of identification such as a driver’s license and passport to the closing. The closing meeting will take a couple hours, and there’s a lot of paperwork. Be sure to read all documents and ask questions.
12. Right of Rescission
Federal law provides an opt-out or cancellation of some types of mortgage transactions called a Right of Rescission. You have until midnight of the third business day after signing the closing docs to rescind (cancel) the following:
• A refinance transaction on an owner-occupied home
• Reverse mortgages
This is not applicable on purchase transactions do not have this feature.