Step 1 LTV & DTI

The first step in obtaining a loan is to determine how much money you can borrow. This is done by figuring out the LTV or Loan-To-Value ratio is the maximum amount of exposure that a lender is willing to accept in financing your purchase. Lenders are usually prepared to lend a higher percentage of the value to creditworthy borrowers. Another consideration in approving the maximum amount of loan for a particular borrower is the ratio of monthly debt payments (such as auto and personal loans) to income. This is know as debt to income to DTI.

Step 2 Credit Score

FICO Credit Scores are widely used by almost all types of lenders in their credit decision. It is a quantified measure of creditworthiness of an individual, which is derived from mathematical models developed by Fair Isaac and Company in San Rafael, California. FICO scores reflect credit risk of the individual in comparison with that of general population. It is based on a number of factors including past payment history, total amount of borrowing, length of credit history, search for new credit, and type of credit established.

Step 3 Down Payment

Lenders expect borrowers to come up with sufficient cash for the down payment and other fees payable by the borrower at the time of funding the loan. Generally, down payment requirements are made with funds the borrowers have saved in their own accounts for a sufficient amount of time. If a borrower does not have the required down payment they may receive “gift funds” from an acceptable donor with a signed letter stating that the gifted funds do not have to be paid back.

Step 4 Choosing the Right Loan Program

Home loans come in many shapes and sizes. Deciding which loan makes the most sense for your financial situation and goals means understanding the benefits of each. Whether you are buying a home or refinancing, there are 2 basic types of home loans, Fixed or Adjustable. Of these 2 types of loans, there are many different variations. The expert and dedicated home loan specialist at can help decided what loan makes the most sense for you.

Step 5 Application and Processing of your Home Loan

Once your loan application has been received we will start the loan approval process immediately. Your loan officer will verify all of the information you have given. Although lenders conform to standards set by government agencies, loan approval guidelines vary and the information gathering process includes but is not limited to:

Income/Employment Check
Is your income sufficient to cover monthly payments? Industry guidelines are used to evaluate your income and your debts.

Credit Check
What is your ability to repay debts when due? Your credit report is reviewed to determine the type and terms of previous loans. Any lapses or delays in payment are considered and must be explained.

Asset Evaluation/Funds Verification
Do you have the funds necessary to make the down payment and pay closing costs? Are the funds coming from your own bank accounts and have they been there for a sufficient amount of time?

Property Appraisal
Is there sufficient value in the property? The property is appraised to determine market value. Location and zoning play a part in the evaluation.

In order to improve your chances of getting a loan approval:

Step 6

After your loan is approved, you are ready to sign the final loan documents. You must review the documents prior to signing and make sure that the interest rate and loan terms are what you were promised. Also, verify that the name and address on the loan documents are accurate. The signing normally takes place in front of a notary public. The Notary Public can meet you at your home, office or an escrow or real estate office. It is important to chose a clean and quiet place for your singing of your final loan documents.

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