An Overview of the Loan Process.

Organize Your Documents

Immediately providing the documents your lender requests GUARANTEES a smooth and timely process.  While your lender's requests may seem redundant or senseless please know they are only doing so for your benefit.  You should expect a detailed explanation for the reason for any request, but at the same time you will only delay your process (and harm yourself) if you refuse to provide the documents in a timely fashion.

1. If you are salaried: provide W-2's for the previous two years (from all employers) and one month of paystubs.

If you are self-employed, provide tax returns for the previous two years, including all schedules, and a YTD profit and loss statement. If you operate as a corporation or partnership then tax returns for those entities will be required as well.

Ask about our Reduced Document loans if you would prefer not to supply the income documentation.  For people with good credit we have special loan programs that simplify the process by not requiring income documentation.

1. If you own rental property, provide recent rental agreements and personal tax returns for the previous two years, including all schedules.
2. Provide statements for the most recent two months for any asset accounts you have - bank,stock, mutual funds and IRA/401K accounts.
3. If applicable, provide a copy of your divorce decree and settlement agreement to verify you have no obligation to your ex-spouse or to verify the receipt of alimony or child support.
4. If you are NOT a US citizen, provide a copy of your green card (front & back). If you are NOT a permanent resident provide a copy of your work visa. This documention is critical because special loan guidelines apply to non-permanent residents.
5. If any borrower has filed bankruptcy, provide the Discharge Notice, Filing and Schedule of Creditors.
6. Provide a copy of the annual property tax bill and homeowners insurance bill for any real estate you own including your current residence.

Get Qualified - Can You Afford The Home?

Getting qualified before you apply for a loan can help you understand how much you can borrow and make sure there are no skeletons in your closet that would throw a monkey wrench into the process.

When buying a home, you may be pre-qualified or pre-approved.

You can be pre-qualified over the phone or on the Internet in a few minutes.  Mortgage industry professionals will readily admit that a pre-qualification "is not worth the paper it's written on."  This step is merely an opinion that you will obtain a loan approval. 

Astoria Financial issues a loan Pre-approval.  This step requires a more rigorous process, including verification of your credit, income, assets and liabilities.

Being pre-approved is the only way you are assured of:

1. Knowing the maximum home value and level of upgrades or options for which you can afford.  Every week we talk to customers like you who were told by their sister or co-worker (have you noticed everyone is a mortgage broker now?) that they could qualify for a particular sales price who find out at the end it was an incorrect figure. 

This is IMPORTANT - not getting the right answers from your lender means you may loose your new home before you even get to move in AND pay hefty late closing fees to your seller.

1. Knowing the exact terms of your loan.  The biggest complaint by consumers is that their lender sprung hidden fees on them or raised the interest rate at the last minute.  The only way for you to obtain an accurate estimate of your loan costs and interest rate you must be fully approved for the loan.

Loan Programs Consultation

What loan program is best for your situation? Lenders offer many different loan options.  Your Astoria Financial Loan Consultant will carefully listen to your needs and provide you the information you need to make the best choice:

1. Think about how long you plan to keep the loan. If you plan to sell your home in a few years or refinance the original loan, you may want to consider an adjustable rate loan. If you plan to keep your home for more than 5 years, you may want to consider a fixed rate loan.
2. Understand the relationship between rates and points.  Each point is equal to 1 percent of the loan. For example 1 point on a $150,000 loan is $1,500. The more points you pay, the lower your rate.
3. Compare different loan programs. With so many programs to choose from, it's hard to figure out which program is best for you. There are literally thousands of home loan programs available.  Your experienced Astoria Financial Loan Consultant can help you find a loan program that best fits your short- and long-term plans.

Obtain Loan Approval

Once your loan application has been received, we will start the loan approval process immediately. This involves verifying your:

• Credit history
• Employment history
• Assets including your bank accounts, stocks, mutual fund and retirement accounts
• Property value
• Based on your specific situation, additional documents or verifications may be required.

To improve your chances of getting a loan approval:

• FILL OUT THE LOAN APPLICATION COMPLETELY.
• RESPOND PROMPTLY TO ANY REQUESTS FOR ADDITIONAL DOCUMENTS.
• DO NOT MAKE ANY MAJOR PURCHASES.  DO NOT BUY A CAR, FURNITURE OR ANOTHER HOUSE UNTIL YOUR LOAN IS CLOSED. Anything that causes your debts to increase will invalidate your current approval.
• ALL MONEY DEPOSITED TO YOUR ASSET ACCOUNTS MUST BE TRACED AND DOCUMENTED.  IF YOU ARE RECEIVING MONEY FROM ANY SOURCE OTHER THAN YOUR REGULAR PAYROLL PLEASE LET US KNOW IMMEDIATELY.  ALL HOME LOAN PROGRAMS HAVE SPECIAL GUIDELINES WHICH MUCH BE MET IF ANY NON-PAYROLL FUNDS ARE USED.
• DO NOT LEAVE TOWN FOR MORE THAN A FEW DAYS DURING THE LAST 30 DAYS OF YOUR PROCESS.  If you do plan to be out of town when your loan is expected to close, please let us know so we can make special arrangements.
• NOTIFY YOUR LOAN OFFICER BEFORE ALLOWING ANYONE TO CHECK YOUR CREDIT - THIS INCLUDES CREDIT CARD COMPANIES, PERSONAL LOANS, OR EVEN ANOTHER MORTGAGE COMPANY.  THERE ARE STRICT GUIDELINES REGARDING YOUR CREDIT SCORE.  CREDIT INQUIRIES MAY LOWER YOUR CREDIT SCORE AND HAVE AN ADVERSE AFFECT ON YOUR LOAN APPROVAL.

Close the Loan - CELEBRATE IN YOUR NEW HOME!

At the end of the process you will be required to sign the final loan documents. This will normally take place in a title company. Be prepared to:

• Bring a cashiers check for your down payment and closing costs.  Personal checks are NOT accepted.
• Review the final loan documents. Make sure that the interest rate and loan terms are what you were promised. Also, verify the accuracy of the name and address on the loan documents.  This is your opportunity to ask questions if you think something is wrong.
• Sign the loan documents. The Escrow Officer will require that you have your picture ID with you. Some lenders also require to see your Social Security card.

Your loan will normally close shortly after you have signed the loan documents. On refinance and home equity loan transactions, federal law requires that you have three days to review the documents before your loan transaction can close. Purchase transactions do not have a three day rescission period.