Articles of Interest

Step 6: Processing Your Loan

What You Need to Provide

1) Before we can underwrite your loan application, you will need to supply us with certain personal documentation. This may include:
• T1 Forms and Notice of Assesments:  These allow the underwriter to scrutinize income and job history, which directly affect applicants' buying power and help reveal how great a risk they might be to the lender.
• Profit-and-Loss Statements (for the past two years): These help self-employed individuals substantiate their income. Gross income may appear low, but business expenses are often "written back" in tax deductions. Lenders usually require profit-and-loss statements, at least for the current year (year-to-date).
• Pay Stubs: These help confirm current income level and verify the applicant's employment. Upon closing, most lenders reconfirm employment, especially if much time has passed since the loan was underwritten.
• Bank Statements (three months' worth): Statements for checking, savings and other accounts indicate the applicants' resources. Underwriters generally hope to establish that the average amount required for a down payment has been maintained over time, not recently obtained.
• Other Assets: These include the value of bonds, stocks, life insurance, retirement funds, jewelry, automobiles, etc.
• Investment Statements: Statements include these for stocks, bonds and other investments.
• Tax Returns (two years' worth): A borrower's returns provide a wealth of financial information. Underwriters look for red flags that could reveal an unforeseen debt in the case of an audit.
• Liabilities: These include creditor names and outstanding balances for all debts including notes payable, loans, life insurance loans, stock pledges and alimony.
• Telephone Numbers and Addresses of Your Workplace: These allow the lender to verify your income.
• Real Estate Owned: This includes property address, market value, outstanding liens, rental income, mortgage payments, taxes, insurance and maintenance dues.

2) Property Information
You'll also need to provide information about the property you plan to buy. This includes:
• Purchase Contract
• Planned Unit Development (PUD), Condominium or Co-Op
     o Name of development or project
     o Phone number of the homeowner's association (if available)
• New Construction:
     o Year the land or lot was acquired
     o Original cost of land/lot
     o Amount of liens
     o Estimated cost of construction
• Refinance Loans:
     o Year property was acquired
     o Original cost of the home
     o Cost of improvements
    o Amount of liens
    o Description of improvements

3) What Goes on at Our End
After you submit the property information for approval, we'll order your title and escrow settlement. If you cancel the loan after title work has been ordered, you may be responsible for preliminary title fees charged by the title company.
Next, a qualified appraiser will look over the property and submit a report to us. This lets us determine if the home is worth enough to support your loan.
A final underwriting will take place that involves analyzing the appraisal report and your ability to repay the loan to determine our risk as a lender.
Once your loan has been pre-approved, the next step is to decide whether you will lock your rate with your mortgage consultant. Locking in your rate ensures that your interest rate won't increase before you close your loan.