:: Which Loan Program Will Best Suit Your Needs?
:: What Documents Will I Need to Apply?

Which Loan Program Will Best Suit Your Needs?

30 and 15 year Fixed Loan Programs.
Fixed rate loans provide the least risk over the long term. If you are planning to keep your home for a period of time beyond ability to predict, a 30 year fixed rate loan is for you. Interest rates remain unchanged for the entire duration. Because the term is fixed for 30 years the rate that a lender will charge is slightly higher when compared to shorter terms. The trade off is security but at a higher price. How long you intend to live in the property plays an important role in deciding what loan you should take. Fixed rate loans with shorter terms are also available. The advantage is that you pay off your loan sooner and the interest rate is lower then the 30-year program. Your payments are higher because you are prepaying more of your outstanding balance each month but your loan will be paid off sooner. Our knowledgeable staff will explain the various options which are available to you!

Adjustable Rate Loan
If you are planning to stay in your existing or new home for a specified period, adjustable rate financing may be your best choice. 1st time homebuyers who are likely to upgrade to a larger home should consider this option closely. Adjustable rate loans are typically fixed for a period of time, and then after that period the interest rate will adjust according to a previously specified index. The rate when adjusted is determined by the index plus a margin. Adjustable rates also have maximum caps which can be adjusted upwards or downwards. The initial fixed term on an adjustable loan can be for as little as a month or as long as 10 years. It is important to determine how long you intend on being in your home to allow for good choice on the type of adjustable rate program which you would consider. Any of our loan officers will be happy to explain the details.

No Income Verification Loans
Are you self-employed? Have you made a recent career change in less than a year? Do you want to maintain privacy regarding your tax returns? These are some examples of why people choose a no-income loan option. No-Income programs typically require that a borrower has more equity in the transaction. Lenders will also charge a slightly higher interest rate for these transactions as being riskier since they have not substantiated the earning power of the borrower. Contact your loan officer to determine if you qualify.

No-Doc Loans
A no doc program provides a borrower with the opportunity to secure a mortgage without disclosing any asset or income information. The rates are higher due to the increase in the loan risk. Less information=more risk. A no-doc loan concentrates on the borrowers credit and the value of the property. These loans will typically require equity of 30% or more and an excellent credit history. Borrowers who are between jobs, retired or have recently come into money due to inheritance may explore no-doc lending options with one of our loan officers.

Non-Owner Occupied Investor Programs
Investment properties are generally defined as a property being rented. 2nd (vacation) homes are not considered to be investment properties. An investment property cannot consist of more than four rental units. These mortgages require complete documentation about the borrower and the property. Typical down-payment requirements are as much as 30% of the purchase price. Interest rates can be fixed for as long as 15 to 30 years. The rates are generally pegged about 1/4 percent higher than normal owner occupied rates.

Equity Lines of Credit
If you own a home and want to do various home improvements, a home equity loan may be the ideal choice. Home equity loans are used for a variety of needs including debt consolidation, medical, vacation property purchases, and almost anything else one might consider. A HELOC is a second mortgage that provides you with funds as needed without disturbing your existing 1st mortgage. Home equity lines of credit (HELOCS) operate differently then most mortgage products. A HELOC is an actual line of credit. Interest is only charged when funds have been drawn across the account. Funds can be paid back, only to be available on demand when needed later. HELOC interest rates are pegged to prime plus a margin of zero to four or more percent. Allowable loan amounts differ from program to program. One general rule of thumb is 80% of the property value minus the existing 1st mortgage. Some HELOC programs can access all remaining equity in a home. Make sure you consult your accountant about the various tax advantages that may be available to you prior to securing your loan.

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What Documents Will I Need to Apply?

Below is a list of the documents normally required to accompany a mortgage loan application. Collecting the necessary documentation in advance will save you significant time in the loan process. It's possible that you may need additional documents depending on your situation and the type of loan. We will inform you if additional documents are necessary.

Purchase Loans
Copies of previous two years W-2 forms.
Copy of the two most recent pay stubs.
Social Security number of all applicants.
The cost of appraisal and credit report.
Legible sales contract signed by Buyers and Sellers.
Name, address, and all income earned from all employers for past 24 months.
Three months most recent statements for checking & savings account(s).
The most recent statement for any Stocks, Bonds, Mutual Funds, IRAs, Thrift Savings Plans (TSP), Retirement Accounts etc.
If you are currently renting, provide either 12 months of cancelled rent checks or the name and address of your current landlord.

Refinance Loans
Copies of previous two years W-2 forms.
Copy of the two most recent pay stubs.
Copy of your 1st mortgage note.
Copy of your 2nd mortgage note (if applicable).
Copy of your Homeowner Insurance declaration page(s).
The Social Security number of all applicants.
The cost of appraisal and credit report.
Name, address, and all income earned from all employers for past 24 months.
Three months most recent statements for checking & savings accounts.
The most recent statement for any Stocks, Bonds, Mutual Funds, IRA's, Thrift Savings accounts, retirement plans. If you choose to include income from Child Support/Alimony, bring copies of payment/divorce decree.

2nd Mortgages/Home Equity Loans
Copies of previous two years W-2 forms.
Copy of the two most recent pay stubs.
Copy of your 1st mortgage note.
Copy of the Deed to your Property (note: NOT the "Deed of Trust").
Copy of you Homeowner Insurance declaration page(s).
The Social Security number of all applicants.
The cost of appraisal and credit report.
Name, address, and all Income Earned from all employers for past 24 months.

VA Loans (Veteran's Administration Loans)
DD-214, Certificate of Eligibility, or statement from your Commanding Officer if you are on active duty.

If you own other properties:
Address of properties and current market value.
Any debt owed on properties, Lender's name, address, account number, monthly payment, and current balance.
Copy of previous two years Federal Income Tax Returns with all schedules.
If rented, a copy of the current lease.

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Additional Documents Needed for ALL Types of Loans

If you are self-employed or paid by commission:
Previous two years Federal Income Tax returns with all schedules and a year-to-date profit and loss statement.

If you have filed bankruptcy in the last seven years:
Copy of petition and discharge, handwritten explanation of reason for bankruptcy, evidence of excellent credit since the bankruptcy.

If you will be using Child Support/Alimony income to qualify:
Copies of court records of payment/divorce decree.

If you will be using income from a Trust Fund to qualify:
Previous two years Federal Income Tax Returns with all schedules and a copy of the complete trust agreement.
2 years W-2's (S.E.) & 1040's.
Current P & L YTD.
2 years 1040 (If self-employed).
Pay stubs for one month.
3 months bank statements all accounts.
Executed copy of contract for purchase.
Copy of deposit checks and source of funds.

If a REFINANCE, copy of warranty deed, survey and prior title policy. » Return to top