The Ventura Mortgage Guy

1. Loan Search-Put yourself in the hands of an experienced mortgage professional, someone who will help you to determine which financing options best suit your needs today and in the future. Look for an experienced loan officer in a market such as today’s environment with all the changes taking place.
2. Loan Application-It is crucial to supply your mortgage professional with as much information as possible, as accurately as possible. All outstanding debts as well as assets and income should be included.
3. Documentation-Paperwork supporting the loan application must also be submitted. In today’s loan environment, in order to get the best rate and program, you must verify the information given in the application. Information commonly given includes pay stubs, two year tax returns, and account statements.
4. Pre-approval-This is a MUST. Get pre-approved for a home loan and know in advance how much house you can afford. Completing this step will also increase your negotiating power since you will become a “cash buyer”.
5. Choose a Realtor-When purchasing a home, you need the resources that a professional Realtor has at their finger tips. Plus you do not pay for the services of the Realtor, the seller will pay the Realtor at the close of escrow. The best way to find an experienced Realtor is to ask your family, friends or work mates for a referral. Or your mortgage professional will be able to refer a Realtor.
6. The Hunt-Begin shopping for a house once you have been pre-approved. Once you find the right home, the terms of the sale will be negotiated, including the price and potentially the terms of the loan being sought. There can be a number of offers and counter offers made.
7. Appraisal-Once you have an accepted offer the lender will require an appraisal on all home sales (a certified person who will provide an estimate of the value of the home). By knowing the value of the home, the borrower is protected from over paying.
8. Title Search-This is the time when any liens against the property are discovered. A lien may have been placed on a property to ensure payment of outstanding debts by the current owner. All liens must be cleared before a transaction can be completed.
9. Termite Inspection-While most purchase loans do not require a formal inspection for termite and water damage, some loans (especially government loans, FHA) allow for the possibility. If problems are found, repairs may be necessary.
10. Processor’s Review-All pertinent information will be packaged by your mortgage professional and sent to their processor. The processor will put a complete package together and send it to the lending underwriter, including any explanations that may be needed, such as reasons for derogatory credit.
11. Underwriters Review-Based on the information put together by your mortgage professional and then packaged together by the processor, the underwriter makes the final decision regarding whether a loan is approved. Working with the right mortgage professional can make all the difference in the world (getting loan approval or being denied).
12. Approval, Denial or Counter Offer-In order to get approval, the lender may ask the borrowers to put more money down to improve the debt to income ratios. The borrower may also need a bigger down payment if the property appraises for less than the purchase price.
13. Insurance-Lenders require fire and hazard insurance on the replacement value of the structure. Flood insurance will also be required if the property is in a flood zone. This is the responsibility of the borrower to obtain and must be done prior to the close of escrow.
14. Signing-During this final step, loan and escrow documents are signed.
15. Funding-At this point, the lender will send a wire or check for the amount of the loan to the title company.
16. Recording-Once the loan has funded, then the note and deed will be recorded with the county recorder’s office. When this is completed, the borrower is now the official owner of their new home.

As you can see, you will want to work with a mortgage professional with experience to ensure that you get a smooth transaction.

This question can sometimes be answered by looking into your bank account. You may be limited to the amount of money you have available for the purchase of a home.

The other factor is how much of a home loan can you afford. You may want to put down as little as possible, but the loan amount that you are left with may not make sense from a monthly obligation stand point.

While it might be tempting to borrow whatever amount of money your lender is willing to give you, it is important to think carefully about how much you’ll actually need to borrow in order to purchase a new home. From the down payment to property taxes to insurance to interest rates, there are many factors to consider when making this important home loan decision.

Contrary to popular belief, there is no standard formula for accurately calculating the specific dollar amount you should borrow when purchasing a new home. Many web sites offer calculators to help with deciding what amount you should, borrow, but the variables vary greatly from one site to another. Another rule of thumb suggests that you should never borrow more than 2 1/2 to 3 times your gross annual income, or that 28%, 32% or even 40% is the maximum amount of debt you should ever take on (your total housing payment divided by your gross monthly income).

As mentioned above, you may be forced to borrow the maximum due to the amount of saving you have available to put towards the down payment. What you must do in this case is determine if the home loan that you end up with by putting the least amount down is affordable. There are lots of lenders that will provide you with the loan with the least amount down, but you are the one who has to make the payment, and therefore that really becomes the important question. What if you only have the minimum amount of money for a down payment (which is 3.5% on an FHA loan, in most cases), and the payment is not comfortable. Then you need to either seek out a gift from a relative, determine if the city has a down payment assistance program or continue to save for a larger down payment and less of a home loan.

The best advise I can give you is to speak with a mortgage professional and get yourself pre-approved (not pre-qualified) for a home loan. By getting pre-approved for a mortgage, you not only increase your chance of finding the perfect house for your needs, you also become a “cash buyer”, instantly increasing your bargaining power.

As a mortgage professional, I see my role differently than a traditional loan officer. While my job is to match you with the best mortgage available for your specific needs, I feel that it is also my duty to make sure it is the most responsible home loan as well.

Whether you choose to work with me or not, be aware. A lender will often offer you the maximum amount of money that you qualify for, whether you actually need the full amount of not. Because of this, it is vital that you sit down with a mortgage professional who you can trust to figure out your complete financial picture.