Realtors Guide For Home Loan Process!!!

Realtors guide for Home Loan Process

Introduction: I have come up with this system to better explain the loan process for the Real Estate community.  I as a Loan Officer, try to educate my fellow Real Estate colleagues in the loan process.  If we all are on the same page then we can work in better harmony.  With the lenders guidelines becoming tighter we have to band together and form a better system of working together.  So that is why I along with some of my Real Estate counter parts we are creating this tool for all of us.

As the Loan officer, I try to collect all documents upfront from the prospective home buyer.  Why? Because no one wants any surprises at the last minute not if we can avoid it upfront upon application.   

 Normal documents needed upon Application:

1. Last 30 days of pay stubs (All Applicants)
2. Last 2 years tax returns w/ W-2's (All Applicants)
3. Most Recent 2 months bank statements/ assets (Proof of funds to close)*
4. Copies of ID(s) and SS Card(s) and Resident Alien Card(s) (If Applicable)
5. Money for Credit Report $50.00 (Must charge for serious applicants only)

*This is a trouble spot a lot of times.  If we can't prove funds to close this slows down the whole process.

 We run their credit and then determine what to do from there.  There are three things that can happen at this point.  Once approved and they can start looking for house. Two, not approved and work on credit with a Credit Repair or with credit repair tactics.  This takes from 3-6 months depending on the severity of the credit issues.  Three, if not approved and decides to payoff collections or paying down on CC Balances.  This takes about 1-2 weeks for the Rapid Rescore then start to look for the home.

 At this point my work hasn't started yet!  Once client is approved and looking for the house it is important to consider some of these tips.  Depending on the type of loan approved for it may be helpful for you to know some of these details when looking for the house. 

 FHA Loan tips when looking for home:

1. Hud Homes- If you go over the appraised value on the site then the client will have to come up with the difference.  Example if website says that the house's value is $100,000 and you offer $105,500 then your client will have to pay $5,500 down for that house even if FHA minimum down payment is 3.5%.  Why because the house has already been appraised and lenders have to go by them, no exceptions.
2. Foreclosures- Most Foreclosures will not make any repairs to the house to close, so keep this in mind when showing Foreclosures.
3. Foreclosures- Not all banks allow FHA financing.
4. Foreclosures- Mainly Fannie Mae or Freddie Mac foreclosures you should ask for 45 days for closing since they ask for docs to be at title like 4-7 days prior to closing to request there approval to the HUD-1 Settlement statement.
5. Flips - Seller must be on title for more than 6 months before closing.  Flips must be on title for more than 6 months and can't make more than 100% profit.

 Under contract:

Once you're under contract must provide me with a clear copy of contract with copy of Earnest Money.  Canceled copy of earnest money check if gave personal check.  Copy of Cashiers check and bank statement to prove came out of bank account. If not then we can't have lender count the credit on HUD statement.

 Loan process begins:

Step 1: Set appointment with buyer to come by office to sign disclosures. (Within 3 days of executed contract date)

Step 2: Price loan with all lenders and Lock Loan. (Day 1-3)

Step 3: Loan processor begins with loan checks file for out dated docs. (Day 1-2) 

Step 4: Orders request for Title work (Day 1-2)

Step 5: Order request for Verification of Employment (day 2-4)

Step 6: Order request for Hazard Insurance (Day 2-4)

Step 7: Order Appraisal (Day 4-6)

Step 8: Orders FHA Case Number and CAIVERS No.(Day 6-7)

Step 9: Order LDP and GSA (Day 7-8)

Step 10: Begin to package loan (Day 8-10)

Step 11:  Send out loan to Lender (Day 8-10)

Step 12:  Turn times for lender (Day 11-15)**

Step 13:  Lenders conditions (Day 16)

Step 14:  Fill conditions (Day 16-20)

Step 15:  Lender puts loan CTC (Day 22)

Step 16:  Lender sends out docs (Day 23-25)

Step 17:  Set closing date (Day 26-29)

*This process can take a bit less or more depending on if something is delayed (Verifications or Proof of funds to close).

**Some lenders have longer turn times than others. (580 Lender want 15 days for submission)

 Realtors guide for loan process created by Frank Marta (Texas Home Loan Specialist).

For more information about loans or this topic please contact us at info@nuhomegroup.com or call us at (713) 455-0134

NuHome Group 713-373-0345
1445 North Loop West Suite 105 Houston, TX 77008
Frank Marta NMLS# 245813/835196