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The loan process can be exciting and daunting as it is commonly recognized as one of the most expensive decisions in your life. Working with experts at Tayton Capital will help put your mind at ease. What you should expect about the home buying process are a few different stages.
Stage one- Getting pre-approved
A pre-approval letter is a document that shows a home seller and realtor that you are ready to buy a home. It is proof that you have spoke with a lender and completed an application, checked your credit report, provided income and asset information to ensure your ability to buy a home.
Stage two- Meeting with Realtor and seeing homes
This is the most fun stage of the process, SHOPPING! You are now ready to go out and look at homes with your realtor based on what you can afford.
Stage three-Putting in your offer & Going under contract
You found a house you love and you want to buy it. In this stage you sit down with your agent and talk through what you want to do to win the home (the price you want to offer, what contingenies you want to address, the timelines etc).
Stage four- Loan process begins
When you go under contract your lender will begin the loan approval process. Your agent will provide the lender with a copy of the contract and they will send you your official loan estimate with the interest rate & fees. If the borrower is happy they will eSign their disclosures and the file will be submitted to underwriting. *underwriting- the process in which underwriters review your income and asset documentation along with the appraisal to a home to verify your ability to secure your loan. They are double-checking the lenders work. Upon receipt of the file the underwriter will issue a conditional approval. A conditional approval means your file or loan will be completed assuming you meet the criteria they ask for. An example could be to provide an updated paystub or to get the appraisal and homeowners insurance in the file.
Stage Five- Final Loan approval (Clear to Close)
This stage means the loan has been signed off on by the underwriters and you are ready to set your closing date and time
Stage Six- Sign for your home
Your loan is complete and you signed all the paperwork for your new home, Congrats!
These stages are the basic components of what you can expect in the home buying process and usually take about 30 days or so. At Tayton Capital, we aim to be ahead of schedule on everything but a standard contract timeline is 30 days.
At Tayton Capital LLC, we believe in empowering our clients with knowledge. That’s why we offer resources to help you understand the basics of mortgages. We’ll explain key terms, help you understand the different types of loans, and provide guidance on what you can expect during the loan process. Our goal is to make sure you have the information you need to make informed decisions about your real estate investments. Contact us today to learn more about mortgage basics and how we can help you achieve your goals.
We understand that our clients lead busy lives. That’s why we offer online forms to make the loan application process as easy as possible. Our secure online forms make it easy to submit your loan application from the comfort of your home or office. We’ll work with you to ensure that you have all the information you need to complete the forms accurately and quickly. Contact us today to learn more about our online forms and how we can help you achieve your real estate goals.
How do I qualify for a loan? Complete application and provide all income and asset paperwork to lender, they will let you know where you qualify.
Can you get a mortgage without a credit score? Yes and no, typically it is very hard to qualify without a score but you can look at doing alternative forms of underwriting to see if your total file is doable.
What’s the difference between being pre-qualified and being pre-approved? Pre-qualified means you spoke with somebodyand talked through your income and assets and pre-approved means you completed application, provided paperwork to validate the conversation. Pre-approvals are what you want in a home buying transaction.
How do I know how much I can afford? A general rule of thumb is to look at the relationship between your gross monthly income and your total monthly debt payments including your new home loan. This number is somewhere between 43-50% so for example, total house and debt payment is 2500 and your income is 5000 you are at 50% of your debt in relation to your income. Although this is something a lender will help you with.
How much do I need for a down payment? Down payments vary greatly with the low side being 3% to as much as you want to put down. There is a common misconception about needing to put 20% down, you don’t need to put it down unless you don’t want to pay for mortgage insurance.
What are mortgage points? Mortgage points are 1% of your loan amount which you can pay as a discount to lower the interest rate and make it more affordable to purchase a home.
What is an escrow account? It is part of your monthly loan payment that covers your properties taxes and insurance. The purpose is to ensure you have enough money to cover those items.