Victory loves preparation and it’s no different when it comes to applying for funding for your dream home.  Here is a great overview that will assist you in ensuring that you have a smooth and effortless loan application process.  Just like building a house, you’ll want to make sure that you are starting and establishing a solid and reliable foundation first.  Remember, CU Lending is here to guide you through the process, so if you have any questions, do not hesitate to contact us immediately at (925) 634-6700.

Step 1. Organize your Documents

A key to avoiding delays and vastly speeding up the loan application process, is to have the required documentation in hand before you meet with your lender. Feel free to call ahead and request a checklist sheet or ask one of our loan officers, exactly what is required. Then take some time and put as much of the required documentation together as you can. Below are some of the documentation that can speed up the process:

• Copy of Purchase Sales contract or Offer to Purchase and all addenda (signed by buyer and seller)
• Past 2 years’ tax returns and W-2s
• Past 2 years’ employment history
• Last 3 consecutive paycheck stubs (5 if paid weekly)
• Name, address and phone for past 2 years’ residence(s) and landlord(s). Renters should bring evidence of 12 months’ rent payments.
• Last 3 months’ statements for savings, checking, CD, money market accounts, etc.
• Recent statement on retirement accounts (IRA, 401K, 403-B, Annuity, etc.)
• Monthly payments and balances on all open accounts
• Divorce decree (if applicable)
• Bankruptcy schedules/Discharge papers (if applicable)
• If you are NOT a US citizen, provide a copy of your green card (front & back). If you are NOT a permanent resident provide a copy of your H-1 or L-1 visa.

Step 2. Get Qualified

Find out how much you are qualified to borrow. When buying a home, you may be pre-qualified or pre-approved. You can be pre-qualified over the phone or on the Internet in a few minutes. Pre-qualification is a good start. However, Pre-approval carries more value when it comes to a home purchase. Pre-approval requires a more rigorous process, including verification of your credit, income, assets and liabilities. It is highly recommended that you be pre-approved before you start looking for a home.

Being pre-approved will:

• Inform you of your maximum affordable home value, and save you from previewing properties outside your price range.
• Put you in a stronger negotiating position with the seller, because the seller will know your loan is pre-approved
• Help you close quickly, since your loan is pre-approved.

Step 3. Shop and Compare Loan Programs

What loan program is best for your situation?

• Think about how long you plan to keep the loan. If you plan to sell your home in a few years, you may want to consider an adjustable-rate or balloon loan. If you plan to keep your home for a longer time, you may want to consider a fixed-rate loan.
• Understand the relationship between rates and points. Points are considered prepaid interest and may be tax deductible. Each point is equal to 1 percent of the loan. For example 1 point on a $150,000 loan is $1,500. The more points you pay, the lower your rate.
• Compare different loan programs. With so many programs to choose from, it’s hard to figure out which program is best for you. Consult an experienced loan originator who can help you find a loan program that best fits your short- and long-term plans.

Step 4. Apply for the Loan

All the research and preparation you’ve done to this point makes this step an easy one.
You can apply online or in person. Complete and sign the residential loan application, Form 1003 and the attached loan info sheet, credit authorization and fair lending notice. Your loan originator may also request additional documents, such as a loan information sheet, credit authorization and fair lending notice.

Step 5. Obtain Loan Approval

Once your loan application has been received, the loan approval process starts immediately. This involves verifying your:

• Credit history
• Employment history
• Assets including your bank accounts, stocks, mutual fund and retirement accounts
• Property value

Based on your specific situation, additional documents or verifications may be required.

To improve your chances of getting a loan approval:

• Fill out the loan application completely.
• Respond promptly to any requests for additional documents. This is especially critical if your rate is locked or if you plan to close by a certain date.
• Anything that causes your debts to increase might have an adverse affect on your current application.
• Do not move money into your bank accounts unless it can be traced. If you are receiving money from friends, family or other relatives, please contact us.
• Do not go out of town around the closing date. If you do plan to be out of town when your loan is expected to close, you may sign a power of attorney, to authorize another individual to sign on your behalf.
• Notify your loan officer before applying for any other credit, including credit cards, personal loans or even with another mortgage company. Some loan programs have strict guidelines regarding your credit score. Credit inquiries may lower your credit score and may have an adverse affect on your loan approval.

Step 6. Close the Loan

After your loan is approved, you will be required to sign the final loan documents. This will normally take place in the presence of a notary public. Be prepared to:

• Bring a cashiers check for your down payment and closing costs if required. Personal checks are normally NOT accepted.
• Review the final loan documents. Make sure that the interest rate and loan terms are what you were promised. Also, verify the accuracy of the name and address on the loan documents.
• Sign the loan documents. The notary will require that you have your picture ID with you. Some lenders also require seeing your Social Security card.

Your loan will normally close shortly after you have signed the loan documents. On refinance and home equity loan transactions, federal law requires that you have three days to review the documents before your loan transaction can close. Purchase transactions do not have a three-day rescission period.