Your mortgage loan takes on many different forms, from application to amortization to refinance. When you get a mortgage with vLoan, it stays in our portfolio for its duration unless you were to refinance with another lender or it enters the secondary market. If you decide to obtain a home equity line of credit, it could split into two loans. If you’re curious about what exactly happens during the mortgage loan process, keep reading!
Application and Origination
While house hunting, you may have gotten a pre-qualification (or pre-approval) to help determine how much house you can afford. The pre-qualification isn’t a guarantee so you’ll have to apply again. Once you decide to purchase real estate property and apply for a loan, you’ll submit your name, social security number, monthly income, property address and its estimated value. During your application, you’ll determine the loan amount and down payment. Once we receive your application, your loan officer will review the information and will request some additional documents. Be prepared to share the following items with your loan officer:
- Proof of employment
- Proof of income (2 most recent paystubs)
- Proof of income from other sources (social security, disability, child support, etc.)
- W-2 forms and tax returns from the past two years
- All current mortgage information (if refinancing)
- Bank account information from past 2-3 years
- Information about purchase
Once your loan officer has the full picture of your financial situation, he or she will help you determine which loan product best suits your financial situation. Your loan officer also pulls your credit report to determine how you manage debt and our loan officers help advise you on ways to improve your score. Once receiving this information, underwriters evaluate the 3 C’s:
- Credit: Credit reports are analyzed to determining how well you manage your debt.
- Capacity: Your capacity is your ability to make payments on the loan. Your employment, income, debt and assets are evaluated.
- Collateral: We evaluate the type of property, value of property and cost. An appraiser is sent to analyze the value of your real estate property and other factors.
Once the underwriters grant approval, a clear to close is processed and your settlement date is scheduled.
At closing, all of your loan’s necessary paperwork is presented and signed. The title of the property is transferred from the seller to you. We set up your escrow account, the amortization schedule is issued, you obtain your funds and the security interest is recorded by the county or city clerk.
Now that your loan has closed, you’ll be required to make regular payments following the amortization schedule. You can make additional payments if you want to pay it off sooner. If you decide to refinance or take out a Home Equity Loan or Line of Credit, the loan will be modified depending on your future financial needs.
When interest rates reach historic lows, you may want to refinance your existing mortgage to take advantage of a lower rate. Refinancing can help you lower your monthly payment, shorten your mortgage term or you could take cash out to remodel or pay off debt.
Once you make all the regular payments, your loan matures the date it is due to be paid off. If your loan isn’t paid by its maturity date, it enters default. Depending on the amortization schedule, you may or may not have a balance of principal due on this date.
If you’re interested in starting the loan process to purchase a home or if you’re interested in refinancing, call a loan officer at 1-844-77-vLoan for a mortgage consultation. Apply now if you’re ready to take the first steps on your own!