The initial phase of securing a loan involves assessing your borrowing capacity. If you're planning to purchase a home, it’s imperative to understand your affordability before beginning your property search. By answering a few straightforward questions, we can estimate your purchasing power based on industry-standard lending criteria.
Click here to Pre-Qualify.
You may also consider obtaining a loan pre-approval, which requires the verification of your financial profile, including income, credit, assets, and liabilities. Being pre-approved prior to house hunting enables you to:
Learn More About Pre-Qualification
Loan-to-Value (LTV) and Debt-to-Income Ratios
FICO™ Credit Score
Self-Employed Borrowers
Down Payment Sources
Loan-to-Value (LTV) and Debt-to-Income Ratios
The Loan-to-Value (LTV) ratio represents the highest percentage a lender is willing to finance based on a property's appraised value. In many cases, this can be up to 100% for highly qualified borrowers. A borrower’s monthly debt obligations relative to income—known as the debt-to-income ratio—also plays a pivotal role in loan qualification. Typically, your mortgage payment should not exceed one-third of your gross monthly income. Borrowers with higher debt loads may be required to contribute a larger down payment to achieve a lower LTV.
FICO™ Credit Score
The FICO™ Score, developed by Fair Isaac Corporation, serves as a standardized assessment of creditworthiness used by nearly all lenders. It incorporates various factors including payment history, credit utilization, account age, recent inquiries, and types of credit held. Each time a lender checks your credit, it can impact your score. Hence, it's advisable to permit a credit inquiry only when you’ve decided to proceed with a specific lender or broker.
Self-Employed Borrowers
Self-employed individuals may encounter additional scrutiny during the loan application process due to the complexity of income documentation. Unlike salaried employees who can provide pay stubs and employer verification, self-employed applicants must typically submit two years of tax returns to substantiate their earnings.
Down Payment Sources
Lenders generally require borrowers to provide a sufficient down payment along with covering applicable closing costs. These funds are typically derived from personal savings. However, borrowers can receive “gift funds” from eligible donors, provided there is a formal letter confirming the gift does not require repayment.
Home financing options are diverse. Selecting the most suitable mortgage depends on your current financial landscape and future objectives. Whether you're purchasing a property or refinancing, loans generally fall into two primary categories:
1) Fixed-Rate Mortgage
Fixed-rate loans, commonly structured over 15 or 30 years, maintain the same interest rate and monthly payment throughout the term. Choose this option if you:
2) Adjustable-Rate Mortgage (ARM)
ARMs offer interest rates that may vary periodically, affecting your monthly payments accordingly. Choose this type if you:
By thoroughly evaluating these options and consulting with our experts, you’ll be well-positioned to select a mortgage product aligned with both your present needs and long-term goals.
While all lenders follow standardized federal lending criteria, their internal policies can differ. Loan approval is primarily based on two criteria: your financial capacity and the appraised value of the property.
Upon receipt of your application, our team will begin the approval process. A dedicated loan processor will review and verify the information provided, resolving any inconsistencies with your assistance. Key verification steps include:
To facilitate a smooth approval process:
Once your loan is approved, the final step is the formal signing of documents. Carefully review all details to ensure the interest rate, terms, and your personal information are correct. Signing typically occurs in the presence of a notary public.
You’ll also be required to cover various costs related to the loan and the transfer of property ownership. Bring a cashier’s check for any due amounts, as personal checks are generally not accepted. Additionally, be prepared to present proof of homeowner’s insurance, flood insurance (if applicable), and evidence of premium payment.
After the documents are signed, your loan will usually close shortly thereafter. Please note that federally regulated refinance loans for primary residences include a mandatory three-day review period before final closing.
