THE MORTGAGE PROCESS
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Speak with a Mortgage Specialist now:
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Here’s a checklist of items you’ll need to have to complete the mortgage process.
Pre-Qualification
Before you apply for a mortgage, you need to know your:
- Current monthly income
- Current monthly expenditures
- Desired monthly mortgage payment
- Anticipated sale price or home value
- Anticipated down payment amount
This information makes it much easier to figure out how much you can borrow and how much house you can afford. We offer a free online pre-qualification service that does this for you, and provides you a letter estimating your eligible borrowing amount.
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Obtaining a Loan
Whether you are seeking pre-approval or have agreed on a purchase price for your new home, you need to "prove" your eligibility for a mortgage. Mortgage lenders typically consider the following factors in determining your borrowing eligibility:
- Income
You typically need to prove both your monthly income and income-earning history. - Expenditures
Both your current and projected monthly obligations are compared to your monthly income. As a general rule, your monthly housing expenses should not exceed 28% of your gross (pre-tax) monthly income. Overall, your total monthly expenses (e.g. housing, auto, student loans, credit card, etc.) should not exceed 36% of your gross monthly income. It is important to note that these are general guidelines and can vary depending on the loan program you select. - Credit History
A demonstrated track record of handling financial obligations in a timely manner is a characteristic lenders actively seek. Lenders use your credit report to assess and qualify this track record. By clearly understanding your financial history, lenders can judge the likelihood that you will also handle your mortgage obligation responsibly. - Down Payment Size
Although some loan programs only require a small or no down payment, a larger down payment can be considered favorable. Often, the size of your down payment can be increased through a gift from an immediate family member or by borrowing against another asset (such as a 401k plan).
The following income and employment information is generally required as part of the loan process:
- For the employed:
- Current pay stub showing year-to-date income
- Current W-2 Form
- For the self-employed:
- Current, signed business and personal income tax returns covering a two-year period
- Current balance sheet
- Year-to-date profit and loss statement
- For retired homebuyers:
- Social Security Award Letter
- Either a 1099 Form or bank statement spanning a two-month time period (all pages)
- Copy of your pension check and all supporting documentation
- Bank account information—Bank account statements spanning the most recent two-month time period (all pages).
- Investment information—Including account numbers, current values, and statements spanning two months.
- Credit card information—Including credit card company names, account numbers, monthly payment amounts, and outstanding balances.
- Other loans (auto, student, etc.) information—Including lending company names, account numbers, monthly payment amounts, and number of remaining payments.
- Rental information (if applicable)—Landlord's name, address, and telephone number.
- Other information:
- Name of settlement agent/attorney, firm's name and telephone number;
- Divorce decrees and separation/alimony agreements (if applicable);
- List of other real estate owned, including value, mortgage balance, monthly payment.
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Secure Your Rate
When applying for a mortgage for your home, you'll have to make a decision about the interest rate option best suited for you. Make sure you clearly understand the choices below so you can make an informed decision.
- Lock with a float down option—If you think rates may go lower, but don’t want to take a chance on your hunch being wrong, you can purchase our float down option and get the security of a known rate today—plus the opportunity to get a lower rate if market conditions improve. With this option:
- If interest rates fall, you receive the new, lower rate plus 1/8 percent.
- You pay a refundable fee of 1/2 percent of your loan amount up front. This fee is credited toward your costs at closing.*
- Lock without a float down option—Know a good rate when you see one? With this option, you may lock your rate at the time of application or any time up to five days prior to closing.
- Float your interest rate—You may also choose not to lock your rate at the time of application. You will then have the option to lock your rate at any time during the process, but the rate must be locked at least five days prior to closing. Keep in mind that rates are subject to change at any time, and you are not guaranteed a rate until you contact your mortgage specialist and execute the rate lock addendum.
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Loan Approval
There are several steps involved in approving your loan. At Wachovia Mortgage we will take care of the following:
- Ordering a home appraisal
- Ordering your credit report
- Requesting any missing information necessary to complete your application
- Keep you continually updated
- Promptly contact you with your loan decision
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The Closing
When all the I's are dotted and the T’s are crossed, and the house is ready to change hands, you can breathe easily and think about moving into your new home. At this stage in the mortgage process, the realtors and mortgage lenders work together to close, or settle, the deal.
At the closing will be:
- You
- Your settlement agent/attorney
- The home seller
In preparation for this meeting, you'll need to provide the following information:
- Your desired closing time and date
- Your settlement agent/attorney's name, address, and telephone number
- A survey and/or termite inspection (if required by your loan program)
- A certified or cashier's check as payment for your closing costs
The other closing participants will provide the following information:
- Loan closing documentation-provided to the settlement agent/attorney by the lender;
- Title search and notification of final closing costs-provided to you by the settlement agent/attorney.
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After Closing
Making arrangements to keep the financial commitments you made in buying the house can be a challenge. After closing, your loan servicer should provide you with the following:
- Monthly statements throughout the life of your loan
- The option of setting up an automatic draft payment plan after your first payment
- Property tax and insurance escrow account management
- Annual escrow account balance information
- Customer support
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If You Are Not Yet Ready To Buy
Here are a few hints that can help you increase your future purchasing power:
- Budget.
Focus on saving money. One of the easiest ways to accomplish this is by developing and adhering to a strict budget. - Repair your credit.
Consistency is the key. Make sure your bills are consistently paid on time. Our Online BillPay service can automatically pay your monthly mortgage and other bills for you. - Manage debt.
Refrain from accumulating additional debt while simultaneously paying off or down existing debt. - Look for interest rate reductions.
Your purchasing power increases as interest rates decrease. Keep track of your desired rate or payment amount by registering for our free Rate Alert service.
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