Providing information regarding the lending process to home-buyers

1. Financing and your new
home
Congratulations! You have decided to embark upon the search for
a new home. Your Realtor, with an expertise in the Real Estate
market, will be working with you to find your dream home for the
best value negotiable.
This document is designed to help you understand the loan
process, and the steps you will need to take to obtain financing
for this very important investment.
Contents
How Much House?
Loan Programs
The Loan Process
Timetable
Resources
www.openmortgageseattle.com
701 5th Ave Suite 7340 – Seattle, WA 98104
206.838.9680

2. How Much House?
The price range you start looking for houses in depends on
how much money you can borrow, and what you would like
your monthly mortgage payments to be.
A Pre-Qualification Letter is a fast way to see how much you
are pre-qualified to borrow, and will give you a guideline to
what price range you could be looking at for a house.
Your Realtor when writing an offer on a property can also use
this letter as proof that you qualify for the appropriate financing.
A Pre-Qualification Letter does not commit you to a broker,
lender, or loan program and should be free and expedient
(delivered within one business day of applying).
You can fill out an application for a Pre-Qualification Letter
online at:
https://davidcapelli.mortgagexsites.com/mercury/loanappweb/L
oanAppNew.aspx?AWSAccountsID=503111&LanguageID=1
www.openmortgageseattle.com
701 5th Ave Suite 7340 – Seattle, WA 98104
206.838.9680

3. Loan Programs
There are many different lending programs offered by
hundreds of financial institutions.
If you opt to work through a particular bank, a Loan Officer
representing that bank will guide you through the different
Mortgage Packages offered by that institution.
If you opt to work with a Mortgage Broker, a Loan Officer will
work with many different banks to find the most competitive
lending sources and mortgage products available to you.
The market varies daily- Your Mortgage broker will assist you in
selecting a suitable mortgage and offer mortgage and property
related financial advice.
Here are three of the most basic mortgage products offered:
Fixed Rate Mortgage
A mortgage loan the interest rate will remain the same
through the term of the loan.
Adjustable Rate Mortgage
A mortgage loan where the interest rate is periodically
adjusted based on an index
Interest Only
A loan in which for a set term, the borrower pays only the
interest on the principal balance.
www.openmortgageseattle.com
701 5th Ave Suite 7340 – Seattle, WA 98104
206.838.9680

4. The Loan Process
As mortgage consultants, it is our job to make the loan process
flow seamlessly.
We see the loan process in 6 steps:
• Pre-qualification
• Loan program consultation
• Applying for a loan
• Conditional approval of your loan
• Funding
Pre-qualification
An initial determination based on income and credit history
that shows how much financing you qualify for.
Loan Program Consultation
A detailed breakdown of the current market, available loan
programs, and your financial goals that leads to a decision on
what mortgage product you will apply for.
Applying for a loan
Supplying the information required by a lending institution to
fund your loan.
Conditional approval of your loan
The lending institution has approved your file. They will
request additional documentation needed to fund your loan at
this time.
Funding
Financing is finalized.
www.openmortgageseattle.com
701 5th Ave Suite 7340 – Seattle, WA 98104
206.838.9680

5. Timeline
The timeline for every home loan is very different depending on
your scenario. This chart illustrates a generic example of steps
taken to obtain a mortgage loan.
Step 4
Step 2 Step 3
3-6 weeks from signing
1-2 weeks from signing purchase 2-4 weeks from signing
Initiation purchase and sales agreement
and sales agreement purchase and sales agreement
• Obtain Pre- • Lender gives
• Sign Purchase
Qualification conditional approval
Agreement with
through a Loan Officer of your loan
Realtor
• Loan Officer submits
• Choose a Realtor • Complete Loan
additional paperwork
Funding
Application
• Make an offer on a to lender
• Lender orders appraisal
home
• Sign closing
and title work
• Loan Program paperwork on your
• Obtain Home Hazard
Consultation Loan home at escrow
Insurance Quotes
Officer company
www.openmortgageseattle.com
701 5th Ave Suite 7340 – Seattle, WA 98104
206.838.9680

6. Frequently Asked
Questions
Why does every lender have a different rate?
Every conventional conforming loan that is made ends up in one or two places; Fannie
Mae or Freddie Mac. Different companies have different ways of getting there. Some
people pitch very low rates, and are able to offer them by charging excessive fees that
buy down the rate, or are advertising rates based on short lock periods and ARMS that
rapidly increase over time.
When it comes to rates the important thing to ask is “What is the best rate I can get and
how much will it cost me?”
Open Mortgage Seattle is committed to finding the lowest rates available
on the market without tagging on junk fees.
If it saves you money in the long run to buy down your rate we will discuss that in your
investment options, but we will not advertise low rates that are guaranteed to cost you
money in the long run.
What’s the difference between being pre-qualified and pre-
approved?
A Pre-qualification letter looks like a pre-approval letter, but has not been submitted to
an underwriter. Someone may issue a pre-qualification letter to intrigue your business,
but funding is not approved.
Pre-approval means you have completed an application with a loan officer which has
been reviewed by an underwriter at a bank. This letter shows how much you are
qualified to borrow and states that funding is guaranteed.
How long does it take to get Pre-Approved?
24 hours max. Pre-Approval letters can often be sent within hours of contacting your
Loan Officer.
www.openmortgageseattle.com
701 5th Ave Suite 7340 – Seattle, WA 98104
206.838.9680

7. What types of documents will I need for the pre-approval
process?
If you are providing full documentation of your income, you may need to provide:
• W-2’s (2 years)
• Pay-stubs (past 2)
• Asset statements (bank statements/retirement account)
What types of things affect the loan?
You credit history, down payment, and debt to income ratio are the main factors you
have control over that affect the amount you qualify for and the rate available to you.
The mortgage market itself is affected daily by stocks, bonds, and economic reports.
The state of the market mandates what programs are available at what rates for your
scenario.
How much money should I put down?
Any down payment will reduce your monthly mortgage. With a down payment of 20% or
more you can avoid the cost of mortgage insurance.
You do not need a down payment to secure funding at a desirable rate. There are many
affordable mortgage programs available, including loans that require little or no down
payment.
What if I have no money for a down payment?
There are many affordable mortgage programs available that require little or no down
payment.
What if I have a low credit score?
There has been a lot of talk lately about the bottom falling out of the sub-prime lending
market. Open Mortgage Seattle has over 10 years of experience in finding the best
mortgage options for all of our clients- regardless of your credit score.
www.openmortgageseattle.com
701 5th Ave Suite 7340 – Seattle, WA 98104
206.838.9680

8. Resources
Open Mortgage Seattle Website
www.openmortgageseattle.com
Loan Application for GFE and Pre-Approval
https://davidcapelli.mortgagexsites.com/mercury/loan
appweb/LoanAppNew.aspx?AWSAccountsID=50311
1&LanguageID=1
US Department of Housing and Urban
Development
www.hud.gov
Mortgage Calculators
www.davidcapelli.com/MortgageQualifierCalc
www.davidcapelli.com/MortgageCalculators
Real Estate Glossary
www.davidcapelli.com/RealEstateGlossary
Daily Lock Advisory
www.davidcapelli.com/DailyRateLockAdvisory
Open Mortgage Seattle Direct Line
888.948.0159
www.openmortgageseattle.com
701 5th Ave Suite 7340 – Seattle, WA 98104
206.838.9680