Buying a Home - Mark Chaffee | Vermont Mortgage Advisor

FIRST TIME HOMEBUYER

We will help you feel confident in our guidance, minimize your stress, and meet all your mortgage needs by providing excellent service on a speedy timeline.

What to Expect

Buying a new home or property can be an exciting, but sometimes overwhelming process. To help you successfully navigate the home loan process we have summarized it to provide you with a better understanding of what to expect.

Click through below to learn more about each step in the process.

Pre-qualification

In the world of real estate the terms “pre-qualification” and “pre-approval” are often used interchangeably. However, they have two different meanings.

What is Pre-Qualification?

It is imperative to be pre-qualified before starting your search for the perfect home. The process for pre-qualification includes a credit check, determining what you can afford and confirming that you have adequate assets for the down payment and closing costs. Once we have reviewed this information, we make sure you meet all the underwriting requirements for the loan. Once you have been pre-qualified, you can shop for a house with more certainty and less anxiety.

All loans are subject to credit and property approval. Other restrictions and limitations may apply.

Pre-Qualification

The Application

The application is the true start of the loan process. Completed online or in-person, the application will outline all the documentation you must submit. The program details and costs will be discussed and you will receive a detailed Loan Estimate outlining all of the loan specifics, including total cost and monthly payments.

All loans are subject to credit and property approval. Other restrictions and limitations may apply.

The Application

Processing

Once the application has been submitted, the processing of the mortgage begins. All information on the application, such as bank deposits and payment histories, are verified. Any credit issues, such as late payments, collections and/or judgments will be reviewed. The processor also examines the Appraisal and Title Report checking for property issues that may require further investigation. The entire mortgage package is then put together for submission to the Underwriter.

Required Documents 

Current pay stubs for the most recent month (normally 2 pay stubs).
Most recent monthly bank/asset statements (all pages) to show the funds for the down-payment and closing costs.
Most recent W-2 Forms (2 years).
Copy of the Purchase and Sales Agreement and property listing sheet (purchase).
Copy of property tax bill and home insurance declaration page (refinance)
Valid photo identification (driver’s license, Passport, etc).

Self-Employed Borrowers (additional documentation)

Signed personal Federal tax returns – including all schedules (most recent 2 years) and K-1s (if any)
Business returns (2 years) if own 25% or more of the business

Different programs require varying amounts of documentation. The loan program you select may require more or less documentation. Please contact us for a FREE, no-obligation consultation.

All loans are subject to credit and property approval. Other restrictions and limitations may apply.

Processing

The Appraisal

An Appraiser researches the market to arrive at a property value. As the Appraiser compiles data pertinent to the report, consideration must be given to the site and amenities as well as the physical condition of the property. Considerable research and collection of data must be completed prior to the Appraiser arriving at a final opinion of value. The Appraiser is an independent vendor and has to be chosen on a rotating basis. Importantly, Mortgage Financial, Inc. uses a local panel of experienced appraisers. Most larger banks and lenders use national appraisal management companies that will often assign appraisers from outside the immediate area.

There are three common approaches to arriving at an estimate of value:

  Cost Approach:
This method derives what it would cost to replace the existing improvements as of the date of the appraisal, less any physical deterioration, functional obsolescence, and economic obsolescence.

Comparison Approach: 
Uses other ‘bench mark’ properties (comps) of similar size, quality and location that have recently sold to determine value. This is the approach used for residential lending and the approach given most weight determining the final property value.
Income Approach: This method is used in the appraisal of rental properties and has little use in the valuation of single-family dwellings. This approach provides an objective estimate of what a prudent investor would pay based on the net income the property produces.

All loans are subject to credit and property approval. Other restrictions and limitations may apply.

The Appraisal

Underwriting

Once the Processor has put together a complete package, the file is sent to the Underwriter. The Underwriter is responsible for determining whether the file is deemed an acceptable loan. If more information is needed, the loan is put into ‘Suspense’ and the borrower is contacted to supply more information and/or documentation. If the loan is acceptable as submitted, the loan is put into an ‘approved’ status and any additional conditions are requested of the borrower.

All loans are subject to credit and property approval. Other restrictions and limitations may apply.

Underwriting

Closing

Once the loan is approved, the file is transferred to the closing department. The closing department notifies the closing attorney of the approval and verifies all closing expenses. The closing attorney then schedules a time for the Borrower to sign the loan documentation.

At closing you should:

Bring a cashier check for your down payment and closing costs (made payable to you to be signed over at the closing). Personal checks are normally not accepted over certain limits (usually $1000).

Review the final loan Closing Disclosure (CD). Make sure that the interest rate costs and loan terms are what you agreed upon and match up with your initial Loan Estimate (LE). Also, verify that the names and address listed on the loan documents are all accurate.

Be sure to bring valid photo identification to the closing.

Sign the loan documents and take ownership of your new home!

All loans are subject to credit and property approval. Other restrictions and limitations may apply.