Loan Process

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Frequently Asked Questions

Organize Your Documents 

Get Qualified

Getting qualified before you apply for a loan can help you understand how much you can borrow.  It is unbelivable, yet true, that your info actually may be sold by the credit bureaus once your credit is pulled.  To avoid the sudden harassment of solicitations, we highly recommend that you sign up with and to protect yourself when applying for a home loan.

When buying a house, you may get pre-qualified or pre-approved. Choice Finance® will not issue a mortgage pre-qualification.  Too many mortgage companies and their Loan Officers are willing to issue this type of letter after a brief phone interview with the borrower. These companies are eager to make sure they get your business, so they are very hesitant to make you (the borrower) fill out a complete application, pull 3 credit scores, and receive in-hand the borrower's necessary income and asset documentation.
Getting pre-approved will help you:

  1. Find out the maximum house you can buy, so you don't waste time looking for properties you can not afford.
  2. Puts you in a stronger position when you are negotiating with the seller, because the seller knows that your loan is already approved.
  3. Helps you close quickly, since your loan is already approved.

Shop Loan Programs and Rates

To shop for a loan you will need to:

  1. Think about how long you plan to keep the loan. If you plan to sell the house in a few years you may want to consider an adjustable rate mortgage. On the other hand, if you plan to keep the house for a longer time, you may want to look at fixed loans.
  2. Understand the relationship between rates and points. Points are considered to be prepaid interest and are tax deductible. Each point is equal to one percent of the loan. So for example 1 point on a $150,000 loan is $1,500. The more points you pay, the lower the rate you will get.  Typically, you will buy your rate down .25% for every point you pay.
  3. Compare different programs. Shopping for a loan can be difficult. With so many loan programs to choose from, each of which has different rates, points and fees, it's hard to figure out which program is best for you. That's where an experienced loan officer can help you make a decision that's best for you.

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Obtain Loan Approval

Once your loan application has been received we will start the loan approval process immediately. This involves verifying your:

  1. Credit history
  2. Employment history
  3. Assets including your bank accounts, stocks, mutual fund and retirement accounts
  4. Property value

Based on your specific situation, additional documents or verifications may be required. To improve your chances of getting a loan approval:

  1. Fill out the loan application completely.
  2. 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.
  3. Do not make any major purchases. Do not buy a car, furniture or another house till your loan is closed. Anything that causes your debts to increase might have an adverse affect on your current application.
  4. Do not move money into your bank accounts unless you can show a detailed paper trail.  If you are receiving money from friends, family or other relatives, please contact us first so we can help you make sure correct procedure is followed when receiving a gift.  Otherwise, you're loan could be delayed.
  5. 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.  This power of attorney must be approved by the lender and drawn up with the settlement attorney.  Talk to your Loan Officer first so he/she can guide you.

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Close the Loan

After your loan is approved, you will be required to sign the final loan documents. This will normally take place at the settlement company's office. Be prepared to:

  1. Bring a cashiers check for your down payment and closing costs if required. Personal checks are normally not accepted.
  2. Review the final loan documents. Make sure that the interest rate and loan terms are what you were promised. Also, verify that the name and address on the loan documents are accurate.
  3. Sign the loan documents.

Your loan will normally close shortly after you have signed the loan documents. On primary residence refinance and home equity loan transactions, federal law requires that you have 3 days to review the documents before your loan transaction can close and fund. This is called the "recission period" in which the borrower has the right to cancel the loan.

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