The Loan Process
|EVENT||WHO DOES IT||DETAILS|
|Apply||Applicant||Complete an application. This will set the process in motion.|
|Loan Originator||Contact by phone||Your first connection with your loan originator will get a dialogue started which will ensure that you get the loan that you want.|
|Credit Check & Prequalification||Loan Originator||We Pre-Qualify you using artificial intelligence software, or underwriting your loan in-house. Our system will assess your credit, income and assets to quickly determine what loan(s) you qualify for.|
|Required Loan Documentation and Paperwork||Loan Originator||Paperwork is still a big part of the loan process. We will email you forms to sign and a document checklist. Return them promptly to ensure timely processing of your request. You can even upload them to our secure site using the Secure File upload link that we have emailed you. In many cases it is possible to electronically sign your application documents.|
|Rate Lock, Title Work & Appraisal||Loan Originator||Once we determine your loan program, your loan consultant will recommend the appropriate time to lock the interest rate. At this time we will request payment for the appraisal and we will order the title work from the title company selected in the purchase contract (Refinance transactions- title company will be suggested for you from our preferred vendor list). Turn times to receive the appraisal and title work is normally 3-7 days.|
|Loan Submission||Loan Processor||Once all the paperwork is assembled by the processor, your package will be forwarded to the underwriting department for approval.|
|Underwriting/Approval Underwriter/Loan||Originator/Loan Processor||An underwriter will review the loan package and send an approval to the processor/loan officer with any conditions necessary for the approval. The turn time for this step is roughly 24-72 hours.|
If additional items (conditions) are required by the underwriter, your prompt response is required to facilitate your timely closing. Review and approval of these conditions once provided to the underwriters, will take roughly 24-72 hours.
|Clear Loan Conditions||Loan Originator/Loan Processor||If additional items (conditions) are required by the underwriter, your prompt response is required to facilitate a timely closing. Review and approval of these conditions once provided to the underwriters will take roughly 24-72 hours.|
|Loan Documents Delivered||Loan Closer||Loan documents are prepared and delivered to the title escrow agent. The escrow agent will call you to arrange a signing date and time. This is coordinated by your Loan Officer, your Realtor and the Escrow Agent.|
Delivery of your loan documents to the escrow agent normally requires 24-72 hours for preparation and approval of the HUD Settlement. Once the Settlement statement is approved, your loan funds are wired to the escrow agent.
|Loan Funding||Loan Funder/ Escrow Agent||Once the signed loan documents are returned to our Funding Department, they will be reviewed. Graystone Mortgage will allow the escrow agent to fund your loan as long as they have followed our Instructions.|
TYPES OF LOANS:
Conforming Conventional Loans
A loan that conforms to conditions and terms of the government-sponsored enterprises Fannie Mae and Freddie Mac is called a conforming conventional loan, while one that does not is called a non-conforming conventional loan. The down payment of a conventional loan is generally higher than that of a government-insured loan, such as an FHA loan, which is 3.5 percent. Conventional borrowers generally must pay between 5 and 20 percent of a home’s purchase price for a down payment.
FHA offers several types of loan programs to individuals. The 203(b) mortgage insurance program insures loans for purchase or refinance of a principal residence. Approved lenders issue the mortgage funds. The 203(k) program insures loans on a purchase or refinance of a home that needs repairs. This type of loan includes the cost of the home plus the cost of making the repairs. In addition, FHA offers the Energy Efficient Mortgage Program (EEM). This program insures mortgages for individuals looking to both refinance or purchase their primary residence and roll the cost of energy efficient upgrades into the mortgage. The FHA loan program offers borrowers many benefits. As of January 1, 2009, FHA loans require a 3.5 percent down payment. You can receive the down payment as a gift to you from family members or obtain it from other sources such as down payment assistance programs. In addition, the credit and income guidelines are more relaxed on an FHA loan. The program also limits the amount of closing costs you are required to pay.
A mortgage loan program established by the United States Department of Veterans Affairs to help veterans and their families obtain home financing. The Department of Veterans Affairs does not directly originate VA loans; instead, they establish the rules for those who may qualify, dictate the terms of the mortgages offered and insure VA loans against default. VA loans offer up to 100% financing on the value of a home. To qualify for a VA loan, borrowers must present a certificate of eligibility, which establishes their record of military service, to the lender. VA loans, FHA loans and other loans insured by departments of the United States government are securitized by the Government National Mortgage Association (Ginnie Mae). These securities carry the guarantee against default of the United States government.
A jumbo mortgage is a loan that is above the limits set by the government, also referred to as a non-conforming loan. The cost of a jumbo loan is higher than a standard loan, so expect a higher interest rate for a jumbo loan. The home must also be located in a higher-cost area, which is a neighborhood that can support a higher mortgage. Approval of a jumbo mortgage will not occur if the cost of the rest of the area is within conforming loan limits. The entire area must support the cost of a jumbo mortgage. A jumbo loan can be used to purchase single-family and multi-unit dwellings up to four units. You can also use a jumbo loan on a second home. A jumbo ortgage may have a fixed or an adjustable interest rate. A jumbo loan is for the purchase of an existing home or the construction of a custom home, including investment property. Check with your mortgage institution for other eligibility requirements and down payment information.
The United States Department of Agriculture (USDA) Guaranteed Rural Housing (GRH) offers a 100% financing home loan program – meaning zero down payment required! There are certain specific requirements for his loan program, both for the borrower and for the location of the property. The borrower must meet certain income restrictions, and they must plan to occupy the property. The borrower’s income cannot be above 115% of the U.S. median income for the area, adjusted by family size. Best of all, you do not need to be a first-time homebuyer.
Benefits of a USDA Guaranteed Rural Housing loan program:
- No first-time homebuyer requirements
- Eligible in rural areas with a population of 20,000 or less*
- 102% loan-to-value financing (2% up-front Guarantee Fee included)
- Annual fee of 0.40%* of the unpaid principle balance will be included in monthly payment
- Fixed rate loan
- No financial reserve requirements
- Owner occupied residence only
- Income limitations vary per applicable city or area (Cannot be above 115% of the U.S. median income for the area, adjusted by family size.)
- Seller can contribute up to 6% of the sales price towards buyer’s closing costs
- 100% gift funds allowed from family member
As the cost of living continues to rise, seniors are increasingly utilizing the reverse mortgage to help them achieve financial independence in their golden years. A Reverse Mortgage is a federally insured financial tool that offers homeowners aged 62 and older the ability to convert some of their home equity into a supplemental cash flow. It can help provide financial security while guaranteeing that you continue to own your home – without giving up title, or making monthly mortgage payments. Best of all, there are minimal income and credit requirements, and you can use the money without any limitations.
Recent changes by Congress to the FHA-insured Reverse Mortgage program have now made it possible for seniors to buy a home with a reverse mortgage – to be closer to family, to switch to a single story or smaller home, or to move into an active adult community.
Graystone Mortgage, LLC is a preferred lender for The Utah Housing Corporation. UHC Loan Programs offer mortgage loans to qualified first time homebuyers and homebuyers who have previously owned a home. UHC provides down payment and closing cost assistance helping homebuyers without the required funds to purchase a home.