Understanding the Home Loan Process

For many buyers, applying for their home loan is one of the more stressful aspects of buying their new home. The home loan approval process need not be that way. Metro differentiates itself from most other mortgage lenders by being owned by a senior underwriter. Since only an underwriter can actually approve a mortgage loan, Metro's mortgage loan approval procedures are geared towards our clients starting the process with the person who is experienced with making the final decision, the underwriter. This method is faster, more accurate, and eliminates last minute closing surprises.

By having direct contact with the underwriter from the start, Metro Mortgage Company ensures you will not spend monies on inspections, appraisals or other costly items without knowing for sure you are approved for your mortgage financing needs. Peace of mind about your buying power, and confidence that when you place your offer that you are approved for the monies, indicates to the Seller you are a serious buyer and reduces the stress level when it's needed most.

So, be prepared with your income and assets, sales price, employment history, and knowledge about your debts and then pick up the phone and call us. Just a little preparation on your part will pave the way for a very smooth and quick loan approval.

A critical step in the home loan application process is to verify the source of your down payment and closing costs, as well as your employment, income, assets and debts. The underwriter uses this step to determine your qualifications as a borrower and your overall buying power.

Depending on your personal situation and the type of loan program you are applying for, the underwriter may want documentation on all of the following items.

Verify Down Payment & Closing Costs

Acceptable sources of funds for down payment and closing costs include:

• Cash in Bank Accounts
  
• Mutual Funds, Stocks, IRA, 401K
  
• Real Estate Sale Proceeds
  
• A Gift from an Immediate Relative
  
• Loans from Your Own Funds (401K)
  
• Down Payment Assistance Programs
  
• Seller Financing or Assistance

Assets

Common assets considered in the mortgage loan application process may include:

• Savings Accounts, Stocks, Bonds, Mutual Funds
  
• Retirement Accounts - IRA, 401K
  
• Personal Property - Cars, Boats, Jewelry, etc.
  
• Other Real Estate Holdings

Debts

Review a list of all your current debts. This, along with your credit report and FICO Score, will provide a snapshot of your obligations.

Debt-to-Income Ratio

Your debt-to-income ratio is your gross monthly income divided by the amount you spend on debt. Debt items include mortgage payments (including principal, interest, insurance, taxes, and association fees), car payments, credit card payments, student loans, child support payments, etc. Your lender considers the debt-to-income ratio when approving you for a mortgage loan.

Employment Status

Documentation to confirm your current gross income and provide evidence of stable employment. Documentation requirements vary depending upon a number of factors - including the source of income.

For more specific information on these topics, visit the following pages:

Loan Qualification
Loan Closing Costs
FICO Scores
Mortgage Calculator

You'll buy your new home with your heart, but you need to do a home loan with your head! Always, always, always decide upon your mortgage lender prior to shopping for a home. Only an experienced and trustworthy lender can help you avoid any pitfalls in the mortgage process. There is nothing worse than paying for an appraisal or home inspection on your dream home and finding out that, for whatever reason, your loan is not approved after working 30-45 days with a lender. And, it happens more often than we would like to think about.

With all the new loan products available, the mobility of the U.S. population, and the cost of homes sky-rocketing - your mortgage is as important as your purchase and requires the same care and consideration. And, you will most likely get the home if you have a loan commitment/approval letter versus a pre-qualification letter. Pre-quals mean absolutely nothing in the lending world and even less to savvy sellers.

Remember what your Mother always told you - "If it sounds too good to be true" - then it probably is. That adage holds true for mortgage financing more than any other industry we can think of. Reputable lenders should be "close" to one another in what they quote you, not far apart. And, if one is extremely low and another extremely high, perhaps you should get the details before making the decision to proceed. So, be sure to request and compare the lenders good faith estimate with others you have received.

One other thing - a good lender will tell you ALL of the charges to acquire your home - not just some of them. It does you no good to focus on a rate quote and then find out later you're short of funds to close the transaction because the lender didn't give you all the information you needed to know.

For specific information on how to compare mortgage lenders, visit this page:

Comparing Mortgage Lenders

strong>Metro Mortgage Company focuses on originating residential conventional and jumbo loans for A and A- credit clients. Metro also offers many diverse no down payment solutions and VA loans for first time home buyers and veterans The company is privately held and has originated nearly $250M in mortgage loans over the past 18 years.

Metro differentiates itself from most other mortgage lenders by being owned by a senior underwriter. Since only an underwriter can actually approve a mortgage loan, Metro's mortgage loan approval procedures are geared towards our clients starting the process with the person who is experienced with making the final decision, the underwriter. This method is faster, more accurate, and eliminates last minute closing surprises for your Florida Home Loan.