Qualifying for and using a home loan to purchase real estate involves a relatively simple process. An interested homebuyer first becomes pre-qualified for a specific loan amount. He or she can embark on a home search based on the pre-qualified loan amount. After finding the perfect home and negotiating an agreement with the seller, an interested buyer begins the formal loan application process. During the approval process, an appraisal and home inspection are conducted to determine the value of the home and whether any larger issues or expenses are present on the property.
Just before the final loan approval, an underwriter reviews the borrower's entire loan application to determine whether the applicant qualifies for the mortgage. Once the underwriter gives his or her approval, the loan moves to closing and funding.
Click here to read the essential steps to get you ready to apply for a mortgage.
When an applicant applies for a home loan, he or she must present a number of documents. These items help Academy determine whether a potential borrower is qualified to take out a loan, how much he or she can be approved for, and the interest rate assigned in conjunction with the mortgage. Compile the following items in a folder to keep them safe and secure:
In some instances, additional documentation is required. For example, if someone is self-employed, he or she must provide a year-to-date-profit-and-loss statement and balance sheet. Borrowers should speak with their Academy Loan Officer to double check that all documents are collected and ready.
“There is too much information—and misinformation—on the Internet, and we have seen so many buyers become overwhelmed and confused when trying to research buying a home. My suggestion would be to contact your Academy Loan Officer the moment you start thinking about buying. The mortgage process has become quite complex and having a roadmap to help you navigate that process is extremely important and will make things much easier for you. Your Loan Officer will help identify your goals and find programs that fit those goals. You will also have your credit pulled, and doing so very early in the process allows time to correct any inaccuracies and possibly work on issues that could save you money. With an early guiding hand from your Loan Officer, you will have a much more pleasant experience and may actually enjoy the mortgage process!”—Jason Klaskin, Loan Officer, Lansdale, Pennsylvania
“The two major contributing factors to your interest rate are your credit score and your down payment. Not all loan programs are equal when it comes to how each of these will affect your rate. For example, a large down payment may help reduce your rate substantially on a conventional loan, while it has very little influence on your rate for an FHA loan. With regard to your credit score, the higher your score, the lower the rate. I always recommend speaking with your Loan Officer and financial advisor before paying down any debts. Simply paying down a balance or paying off a collection may not have any impact on your credit score. A seasoned Loan Officer will be able to review your overall financial profile and help you get the best rate possible on a home loan.”—Jake Krabbe, Sales Manager, Scottsdale, Arizona
In some instances, Academy may require buyers to purchase private mortgage insurance. PMI serves as a protection for Academy in case a borrower is unable to keep up with mortgage payments. This type of insurance also allows Academy to approve applicants who may otherwise be risky. An interested homebuyer who wants or needs to provide a lower down payment can do so if he or she also purchases PMI. Once a homebuyer accrues at least 20% equity in the property, he or she is eligible to cancel the PMI.
With an in-house team of processors, underwriters, and closers, your Academy Loan Officer will be up to date on the status of your loan at all times and will frequently communicate with you throughout the loan process. In addition, you will receive five dynamic videos at specific milestones in the loan process that educate you on what is involved in each particular step: Documentation, Appraisal, Underwriting, Clear to Close, and finally, Congratulations—you’ve completed the loan process!