The entire business of mortgage loans can be quite complicated, but the process of applying for one doesn’t have to be. In fact, we at Sunquest Funding take pride in providing excellent, personalized service to our customers and clients, so that we can make their experience as easy and pleasant as possible.
Online Portal & Application
When you decide to go with SunQuest, your Loan Officer we’ll get you set up through our online portal. We’ll send you an email with special and secure login credentials, and you’ll be able to electronically sign all documents, upload critical documentation and receive the important disclosure information we’re required to send all mortgage applicants. Depending on available documentation you supply us, our efficient methods and high-tech loan processing systems enable us to pre-qualify you for a mortgage on the same day we take your application.
Processing Your Loan Application
After we complete your NJ mortgage application, we work with you to make sure that all the required documentation has been obtained and all the conditions stated in the preliminary approval have been met.
Depending on your credit history, income and down payment, the required documentation typically consists of the following:
- Photo ID (i.e. drivers license, passport, etc.)
- Most recent consecutive four week’s pay stubs.
- Last two years W-2 forms.
- Confirmation of available down payment funds in a depository institution for the past 60 days (i.e. statements from a bank, credit union, brokerage, etc.).
- Sales contract that details the property you are purchasing.
- If you’re refinancing, we’ll need a copy of your most recent mortgage statement.
Once we get your documentation, we’ll send you a clear and honest estimate of all your closing costs. The Loan Estimate form provides you with important information, including the estimated interest rate, monthly payment, and total closing costs for the loan. The Loan Estimate also gives you information about the estimated costs of taxes and insurance, and how the interest rate and payments may change in the future. In addition, the form indicates if the loan has special features that you will want to be aware of, like penalties for paying off the loan early (a prepayment penalty) or increases to the mortgage loan balance even if payments are made on time (negative amortization). If your loan has a negative amortization feature, it appears in the description of the loan product. The form uses clear language and is design to help you better understand the terms of the mortgage loan you’ve applied for. All lenders are required to use the same standard Loan Estimate form. This makes it easier for you to compare mortgage loans so that you can choose the one that is right for you. When you receive a Loan Estimate, the lender has not yet approved or denied your loan application. The Loan Estimate shows you what loan terms the lender expects to offer if you decide to move forward. If you decide to move forward, the lender will ask you for additional financial information.
This is a legal document that your Loan Officer must send you: it’s a five-page form that provides final details about the mortgage loan you have selected. It includes the loan terms, your projected monthly payments, and how much you will pay in fees and other costs to get your mortgage (closing costs). The lender is required to give you the Closing Disclosure at least three business days before you close on the mortgage loan. This three-day window allows you time to compare your final terms and costs to those estimated in the Loan Estimate that you previously received from the lender. The three days also gives you time to ask your lender any questions before you go to the closing table.
We get your property appraised. The report is written by a licensed appraiser who visits the property and measures it, draws a simple floor plan and takes photos. The appraiser also compares the property to other recently sold properties in the area to determine “fair market value.”
Title Search & Title Report
The search and report documents who owns the property and what leans, if any, are against it; all leans must be paid and satisfied prior to funding your New Jersey home loan mortgage. The report will also include information about any easements or other rights that apply to the property.
After the loan processing is complete, an Underwriter will review and analyze your New Jersey mortgage loan package. If mortgage insurance is required for your loan, the underwriter will also submit the loan package to a mortgage insurance company for review. The underwriting process usually takes two days or less to complete.
Credit Decision and Final Approval
Once Underwriting is complete, your New Jersey loan is either approved, denied, or suspended. In reaching a decision on your application for a mortgage, the Underwriter will consider your income, credit, cash reserves and the property itself. Here are a few things that the Underwriter considers:
- Housing Expense Ratio. The percentage of your gross monthly income it takes to make your house payment, including taxes and insurance. For example, If you earn $3,600 and your house expense is $1,200, you have a 33% housing ratio (1,200 is one third of 3,600).
- Total Expense Ratio.The percentage of your gross monthly income it takes to pay your house payment plus other monthly payments you make, such as car payments, credit card debt and student loans.
- Cash Reserves.Money you have left in the bank after your New Jersey mortgage loan, or refinance mortgage loan closes. Cash in the bank is very important in case you run into unforeseen circumstances. Usually, two months’ worth of house payments are required.
- Credit History.Generally speaking, the timeliness with which you’ve paid your bills in the past. Underwriters will generally focus on the last two years.
- Loan-to-Value Ratio (aka “LTV”). If you have a house valued at $100,000 with a $90,000 loan you have a 90% loan-to-value ($90,000 divided by $100,000 = 90%).
Funding Your Loan
The satisfying conclusion to the process of getting a New Jersey home mortgage is called the “settlement,” or “closing.” During the settlement, you’ll read and sign numerous purchase (or refinance) documents. Depending on the complexity of the transaction and the condition of the documents, most closings take about an hour or less to complete.
There’s a lot to consider here, which is why we always recommend to any potential borrower to give us a call and speak to us directly. It can get overwhelming pretty quickly, which is why it’s good to work with someone who has been in the field for decades. Call us today at (908) 272-8330 and ask all your questions!