Understanding The Loan Process
Pre-qualification is a first easy step. If you would like an estimate on the loan amount you are likely to qualify for so that you can shop for homes within your price range, pre-qualification is a quick and easy way to find out. A pre-qualification is based on unverified information provided by you to your loan advisor. The process takes just a few minutes. Click here to get started. You can also get pre-qualified via phone 415-945-8880.
Pre-approval requires a completed loan application and submission of financial records for verification. In this step, we gather all the information required to start the loan process, and your credit report will be checked. You’ll need to provide documentation of your income, assets, liabilities and your identity. The documents typically required are:
- The most recent month’s paystub(s) from your job covering one full month.
- W-2 forms for the last two years.
- Federal Income Tax returns (1040’s) with all schedules for previous two years.
- For Corporations, Partnerships and LLC’s, federal tax returns for previous two years (if you own 25% or more of the entity)
- Signed year-to-date Profit and Loss statement and Balance Sheet for each business you own.
- Two most recent bank statements (this includes your checking account as well as any money market, savings or other accounts)
- Two most recent statements for IRAs or retirement accounts
- Ditto for any stocks or mutual funds you own outside of retirement accounts
- Your driver’s license
Your documentation will be reviewed by an underwriter and pre-approved conditioned upon an appraisal of the property. We will provide you with a pre-approval letter that your realtor will ask for when you are ready to make an offer on your dream home.
Pre-approval does not guarantee final approval of your loan.
Once in contract on a home we will provide you a Loan Estimate and other disclosure documents. The Loan Estimate will spell out the terms of the loan you have applied for, including the interest rate, loan type (fixed-rate, adjustable) and closing costs. You will be able to compare loan product offerings among lenders and find the loan that works best for you.
Appraisal Process. A real estate appraisal report will be completed for your new home, and will be required for final approval of the loan. The appraisal report confirms the value of the property to the lender. You will receive a copy of the appraisal report.
Loan Conditions. After loan approval most banks will have a few additional paperwork requirements that need to be submitted to the bank before closing documents are prepared.
Closing. You will sign the final closing documents at a title company office. Your signature will be notarized and your identity verified. Once the final closing documents have been signed the transaction will close a few days later.