F.A.Q.

What do I do after I have found the home I want to purchase?

It is time to contact the seller who may be an individual or an representative of a real estate agency. Negotiations can begin for the sale of the property. Once the buyer and seller have agreed on a purchase price and developed sales agreement, it is time for the buyer to apply for a loan.

How do I apply for a loan?

Applying for a loan is very simple and easy with us. Just go to www.EliteLoanWeb.com/loan.html, fill out an application form and we will get back to you as soon as possible.

What counts in the loan application process?
Your Income

The amount of income you make will determine the amount of money you can borrow to purchase your home. For example, if a person makes $5000 a month and spends $1600 on a mortgage loan, including property taxes, mortgage insurance and hazard insurance, the housing expense ratio is 32% (1600 divided by 5000). Normally to qualify for mortgage loans lender may spend a maximum of 33% of their mortgage payments.

Your debts

The lender will look at the monthly debt such as loans, charge cards, child support, etc. made monthly by the applicant. The percentage of debts to income is known as the debt-to-income ratio. A good goal is to spend about 38% of your income on all debts including the contemplated mortgage payment.

Your employment history

It is important for the lenders to see a steady employment in any occupation held by the applicant. Mortgage lenders are more likely to lend money to people who have worked several years at the same job or the same type of job. A Verification of Employment Document will be requested by the lender to verify your work history.

Your credit history

Each borrower has a credit history report that is filed with the Credit Bureau. Lenders receive a copy of your credit history in the loan application process in order to determine your willingness to pay as a borrower. This assessment depends on your credit record, ie. if you have been late on your various payment obligations.

What is the property worth?

The lender will want to know the value of the prospective home. The loan amount approved will depend on the value of the property to be determined by an appraiser. This appraisal is to ensure that the lender can recover the money he lends, even if you stop making payments. If the borrower fails to repay the loan, the lender has the right to sell the home to pay off the loan -- a process known as foreclosure.

How do I know which loan program will benefit me the most?

There are various types of loan programs design to suit the financial needs of individual borrowers. In deciding the type of loan program for which you would like to qualify, it is important to consider your loan amount ......

Loan type

First, the two types of loans are a conforming loan and a non-conforming/jumbo loan. Conforming loans are for amounts between $50,000 to $214,600. Jumbo loans cover loan amounts between $214,600 to $650,000. Higher loan values have special quotes. Loans can be fixed or variable. Fixed rate loans are amortized over a period of 30, 15, or 10 years. Due to shorter commitments for rates, ARM rates are typically lower than longer term rates. These are best suited for transient borrowers.

Loan Amortization

A loan can be amortized over a period of 30 years, 15 years, or 10 years. Adjustable rate mortgage loans will have rates fixed for a shorter period of time. A shorter amortized loan will build up your equity faster and will therefore provide you with a debt-free home; however, mortgage payments are hirgher for shorter amortized loans.

Loan-to-Value

The loan amount you receive will depend on the appraised value of the property and how much down payment you can afford. If you are purchasing a $100,000 home with $20,000 down payment available, it will be necessary to borrow an amount of $80,000 from a lender to purchase the property. This will be 80% of the home value; therefore, the loan-to-value of your mortgage is 80%. LTV's can be as high as 97%.

What documents are needed to process my loan?

We do not require any documents to apply for a loan. However, some documents might be needed later. These may include credit reports, the loan application, an appraisal of the property, income verification, asset verification, and various other document depending on the complexity of your personal financing situation.

Who's who in the housing business?

Real Estate Agent/Broker

When you first start looking for a new home, contact a real estate company in the area that you are planning a purchase. The real estate professionals will show you many available houses in your price range that will meet your personal needs. When you decide on a home to purchase, make an offer on the home. The real estate broker will present your offer to the seller. But please remember that the broker is under contract to the seller to represent the seller's interest. When an agreed price has been reached, it is necessary to draw up a sale of contract document signed by both the buyer and seller.

Mortgage Brokers

The mortgage brokerage firm has loan officers who will find the best loan program to suit your financial needs and concerns. The mortgage broker represents numerous wholesale lenders and typically searches for the best program and rates to suite your particular needs. East West Mortgage would like to be your mortgage broker Online Application

Loan Officer

The loan officer will be the buyer's liason to the lender for the obtaining a loan.

Lender

Banks, savings and loans, and mortgage companies lend money to home buyers. Your lender will ask you to fill out a loan application form that includes information about your income, employment, and debts. Online Application

State or Local Housing Finance Agency

Some government agencies provide valuable housing assistance to low- and moderate-income home buyers and renters. To find out more about these programs, ask your real estate agent or your mortgage broker.

Property/Mechanical Inspector

For a fee, a qualified inspector will examine the home you've chosen from basement to attic. The inspection includes an evaluation of the home's plumbing, electrical work, appliances, the furnace and/or air conditioners, roof, and structural stability. These inspections can save you thousands of dollars in the future and the knowledge of flaws can help you negotiate a better price on the house.

Appraiser

The appraiser will be hired by the mortgage broker or lender to determine the market value of your prospective home based on its condition and the selling prices of comparable homes recently sold in the area. This estimate helps the lender decide a reasonable loan amount for the mortgage.

Mortgage Insurer

Mortgage insurance makes it possible for lenders to offer mortgage loan options to buyers with small down payments. If for some reason you can no longer make your payments, mortgage insurance helps cover the lender's losses.

Underwriter

The underwriter works for the lenders in reviewing all the documentation involved with your loan. Once you've applied for the loan and found the loan program appropriate to your needs, the mortgage broker will begin the paperwork to provide all the supporting documents required for the approval the loan. These shall include employment history, credit reports, the appraisal of the home, verification of employment, the uniform loan application, and so forth.

Attorney/Closing Agent

The attorney or closing agent is responsible for ensuring that all documents have been completed properly including those related to the title search and title insurance. The closing agent will explain all closing documents to you and the seller, obtain your signatures, and record the documents with the appropriate local governments. He or she also will collect the transaction fees and give them to the appropriate parties.

What do the words amortization, escrow, principal, foreclosure, PITI, and closing mean?

These words may ring a bell or seem completely foreign. But they are very important concepts to understand when applying for a loan.

Amortization

Gradual debt reduction. Normally, the reduction is made according to a pre-determined schedule for installment payments.

Escrow

An account set up by the lender into which the borrower makes periodic payments, usually monthly, for taxes, hazard insurance, assessments, and mortgage insurance premiums.

Principal

The original balance of money loaned, excluding interest; also, the remaining balance of a loan, excluding interest.

Foreclosure

If the borrower fails to pay back the loan through mortgage payments, the lender has the right to put the home on the market for sale to recover the money owed to the lender. This is known as foreclosure.

PITI

Principal, Interest, Taxes, and Insurance are the components of a mortgage payment.

Closing

The conclusion of a transaction. In real estate, closing includes the delivery of a deed, financial adjustments, the signing of notes, and the disbursement of funds necessary to the sale or loan transaction.

What is refinancing, and when should I apply for it?

Refinancing involves obtaining a new mortgage loan on a property already owned - often to replace existing loans on the property. When the mortgage rates are low, it is a good time to refinance. Refinancing can save you money on your monthly mortgage payments.