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Mortgage Process

Whether it’s your first mortgage or your fifth, we understand that purchasing a home can be an exciting, but stressful time. That’s why we have assembled a great team of experts to help you along the way. Our mortgage advisors, underwriters, transaction coordinators and support staff are experienced professionals and experts in their field. Want to know what to expect before you start the process? Have questions? No problem, contact Sandy for a no obligation consultation!

Loan Options

Pinnacle Capital Mortgage is a direct lender with Fannie Mae, Freddie Mac and Ginnie Mae. That means we have access to loan programs that other lenders may not be able to offer due to their size. We offer many loans to help satisfy the needs of our diverse clients.

Conventional Loan

A conventional loan is a mortgage loan that is not insured by any government agency FHA, VA or USDA. Conventional loans often represent lower rates and great terms as long as the borrower can meet the loan requirements. They typically require a 5-10% down-payment, and may have private mortgage insurance if program minimum down-payment is not met.

FHA Loan

FHA loans are typically more useful for people with lower down-payments and/or lower credit scores. These loans are insured by FHA and can have higher fees associated with them, including monthly mortgage insurance.

VA Loan

VA loans are made by the Veterans Administration for veterans of our armed forces. These loans come with special protections and benefits. VA loans do not require a down-payment in most cases, and there is no monthly mortgage insurance.

Jumbo Loans

Jumbo loans are simply loans that are too large to be considered purchasable for Fannie Mae or Freddie Mac. They typically require 20% down-payment, although here are exceptions for as little as 5% down. The interest rates are usually about .25% – .50% higher than comparable non-jumbo loans.

Reverse Mortgage

A Reverse Mortgage, or Home Equity Conversion Mortgage (HECM), is a type of home loan for older homeowners (62 years or older) that offers no monthly mortgage payments. Borrowers are able to secure a line of credit against the equity in their existing home.

USDA Home Loan

A USDA Home Loan is also known as the USDA Rural Development Guaranteed Housing Loan. This loan features no down-payment options for homes that are in rural areas, and is guaranteed by USDA.

Down-Payment Assistance Programs

Depending on the state and city in which you live, there may be down-payment assistance available to you in order to purchase a home. These are often in the form of grants offered by municipalities and have rules and guidelines that must be followed for the program. Contact a mortgage advisor on whether or not this program can work for you!

What to Expect

In order to ensure the process of obtaining a home loan is as stress-free and transparent as possible, it is important to understand some of the terms the lender looks for, and the items they will need to complete your loan.

The Application

This is the first step in giving your advisor the information they need to help pick a great loan program for your needs and goals. It is vitally important that this information is accurate to prevent the loan from being denied later in the process.

Documentation

This step is extremely important and often is the one step that can hold up a loan. Please sign and date, and then send back disclosures in a timely manner. Include any documentation that your mortgage advisor or transaction coordinator have requested. Please be sure to include all pages of your bank statements and a full 30 days of pay stubs.

The Appraisal

This will be ordered by a team member after your home inspection is completed and approved (if this is a purchase transaction). This generally takes five to seven days, but may be longer or shorter depending on volume.

The Title Report

This report shows if there are liens or other problems with the property that may delay or prevent closing.

The Submission

At this point, all the information that has been collected is organized and sent to an underwriter for approval. This process can take a few days, or as little as 24 hours.

The Conditions

The underwriter will send an approval which usually includes some conditions, or supplemental pieces of information needed to complete your loan. It is very important that any of these requiring action or documentation be taken care of as quickly as possible as to not delay your loan closing. Once they are all gathered, they will be sent to the underwriter for final review and approval.

The Docs & Signing

When everything has been approved by the underwriter, docs can be ordered. These are the documents you will sign to close and fund your loan. These will be sent to your title company to be signed.

Once they have received the closing documents and have worked up their figures, they will call to set up an appointment for you to sign. This usually takes 24 hours after they receive your closing documents. Once everything has been signed, they are sent back to the lender for funding.

Funding & Recording

Once all the signatures and closing documents are checked, then the loan can be approved for funding and recording. This will usually be 24-48 hours after signing. On rare occasion, additional signatures or conditions may need to be met and could cause a delay.

Items You Will Need

In order to speed up the process of closing your loan, please provide the following documents as soon as possible:

  • Last two years W2’s and/or 1099’s
  • Last two years Federal Tax Returns (1040’s), all pages and schedules
  • 30 days’ worth of paystubs, including pension or retirement income
  • Most recent month’s checking/savings account statement, all pages are required
  • Most recent statement for any IRA’s, 401K or stock accounts, all pages
  • Copy of Driver’s License (front and back) and copy of Social Security Card
  • Name and phone number of homeowner’s insurance agent
  • Name and phone number of current and/or previous landlord
  • Copy of Rental Agreement(s) and property tax statement(s) for any rental properties owned
  • Copy of Social Security and/or pension award letters
  • Student loan repayment terms if they are in deferment
  • Signed and Recorded copy of Divorce Decree/Child Support Order (12 months bank statements if receiving support payments)
  • Complete copy of bankruptcy papers (including all discharge papers)

If Self-Employed

  • Last two years corporate and/or partnership tax returns 1065’s, 1120’s, K-1’s
  • Current Profit and Loss statement and balance sheet

Do's & Dont's

When you begin the process of purchasing or refinancing a home, there are a few general “rules of thumb” that can help the process go more smoothly.

Do:

  • Stay current on existing accounts
  • Contact your mortgage advisor with any questions

Don’t:

  • Change jobs, quit your job or become self-employed
  • Buy a car, truck or van (or you may be living in it)
  • Use credit cards excessively or let current accounts fall behind
  • Spend money you have set aside for closing costs or down-payment
  • Omit debts or liabilities from your loan application
  • Buy furniture
  • Originate any inquiries into your credit
  • Make large cash deposits without checking with your mortgage advisor
  • Change banking accounts
  • Co-sign a loan for anyone

Glossary

Adjustable Rate Mortgage

A mortgage loan were the interest rate adjusts periodically based on the changes of a specified index such as the one-year Treasury Bill or the LIBOR.

Amortization

The calculation of the amount of the installment payment it takes to pay off the obligation at the end of a fixed period of time.

Annual Percentage Rate (APR)

The total cost of a mortgage stated as a yearly rate. It is typically higher than the note rate because it includes the base interest rate plus specific closing costs.

Appraisal

A professional report that estimates the market value of a property.

Assessed Value

The value a tax authority places on real property for the purpose of assessing yearly property taxes.

Balloon Mortgage

A mortgage that is amortized over a stated period but provides for a lump-sum payment due at an earlier period, e.g. 30-year due in 15, where the payments are based on 30-year repayment but the loan is due paid in full in 15 years.

Cap

Limits how much the interest rate on an adjustable rate mortgage (ARM) can increase or decrease.

Cash to Close

Liquid assets available to be used to pay the closing costs involved with a mortgage transaction.

Collateral

Property pledged as security for a loan, such as property pledged as security for a mortgage.

Conventional Mortgage

A mortgage not obtained under a government-insured program.

Deed

A legal document that is recorded in the county conveying title to a property.

Deed of Trust

The legal document that pledges the property for the security of a mortgage loan.

Default

Failure to make mortgage payments in a timely manner or to comply with other requirements outlined in the note.

Earnest Money Agreement (Sales Contract)

The written agreement between the buyer and seller of a property, which stipulates the amount of the purchase, closing date and any repairs or other conditions that must be met before the transaction (purchase) is completed.

Easement

A right of way given to persons other than the owner for access to or over their property.

Equity

The portion of a property’s value over and above the amount owed against it.

Escrow

A disinterested third party that handles legal documents and funds on behalf of the seller and buyer.

First Mortgage

A real estate loan that has priority over any other subsequently recorded mortgages.

Fixed Interest Rates

An interest rate which does not change during the term of the loan.

Foreclosure

A legal procedure in which the mortgage loan is in default and the property taken from the borrower and sold by the lender to pay off the loan against the property.

Gift Letter

A written letter signed by the individual giving funds for the purpose of buying a home which states there is no obligation to repay the sum of money being given.

Gross Monthly

Income Total monthly income earned before taxes or other deductions.

Hazard Insurance

Also referred to as homeowners or fire insurance; coverage for physical damage to a property from fire, wind, vandalism or other hazards.

Home Equity Line of Credit (HELOC)

Also referred to as a revolving line of credit; usually a second mortgage, which allows the borrower to obtain multiple advances up to a specific credit limit.

Index

Generally a published number or percentage, such as the yield on the One-Year Treasury Bill, which is used to compute the interest rate for an adjustable rate mortgage.

Jumbo Loan

A loan that exceeds the Fannie Mae legislated mortgage amount, which is currently $333,700. Jumbos are also called non-conforming loans.

Legal Description

Describes the location of the property which has been recorded at the county.

Lien

A legal claim or attachment against property as security for a loan.

Loan-To-Value Ratio

The ratio between the amount of any mortgages against a property divided by the sales price or appraised value.

Monthly Payment

Usually the amount of principal, interest, taxes and insurance paid each month on a mortgage loan.

Mortgage

The conveyance of an interest in real property given as security for the repayment of a loan.

Origination Fee

A fee paid to the lender for processing a loan application. The origination fee is stated in the form of points. One point equals one percent of the mortgage amount.

PITI Reserves

A cash amount a borrower must have left over after making a down payment and paying the closing costs for the purchase of a home.

Private Mortgage Insurance (PMI)

Insurance written by a private company to protect the lender against loss resulting from nonpayment or default.

Purchase Contract (Earnest Money Agreement/Offer)

A written agreement between a buyer and seller of real property, setting forth the price and terms of the sale, also known as a sales contract.

Qualifying Ratios

Calculations that are used in determining whether a borrower can qualify for a mortgage. The two calculations are housing expense divided by gross income, and the total debt including other monthly debt payments divided by gross income.

Rate Lock

A commitment issued by a lender to a borrower guaranteeing a specific interest rate for a specific period of time.

Title Insurance

Provides insurance that public records have been examined to insure that there are no liens or other claims against the property.

Truth in Lending Act

A federal law that requires lenders to fully disclose the terms and conditions of a mortgage including the Annual Percentage Rate (APR) and other charges.

Underwriting

The process of evaluating a loan application to determine credit worthiness and risk involved for the lender.

VA Loan

A loan that is guaranteed by the U.S. Department of Veterans Affairs, also known as a government loan.

 

Contact

Office Phone:  480.612.0634
Cell Phone:  602.999.2406

Address:  8700 E Pinnacle Peak Rd., Suite 108-A
Scottsdale, Arizona 85255

©2017 Pinnacle Capital Mortgage, a division of Finance of America Mortgage | NMLS# 1071 | AZ Mortgage Banker License #0910184 | Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act | Georgia Residential Mortgage Licensee | Illinois Residential Mortgage Licensee | Kansas Licensed Mortgage Company | Licensed by the N.J. Department of Banking and Insurance | Licensed Mortgage Banker — NYS Banking Department | Rhode Island Licensed Lender |