How much can you borrow – Get Pre-Qualified

The first step in obtaining a loan is to determine how much money you can borrow.  In case of buying a home, you should determine how much home you can afford even before you begin looking. By answering a few simple questions, we will calculate your buying power, based on standard lender guidelines.

You may also elect to get pre-approved for a loan which requires verification of your income, credit, assets and liabilities.  It is recommended that you get pre-approved before you start looking for your new house so you: 

Look for properties within your range.

Be in a better position when negotiating with the seller (seller knows your loan is already approved).

LTV and Debt-to-Income Ratios
LTV or Loan-To-Value ratio is the maximum amount of exposure that a lender is willing to accept in financing your purchase. Lenders are usually prepared to lend a higher percentage of the value, even up to 100%, to creditworthy borrowers. Another consideration in approving the maximum amount of loan for a particular borrower is the ratio of monthly debt payments (such as auto and personal loans) to income.

Self Employed Borrowers
Self employed individuals often find that there are greater hurdles to borrowing for them than an employed person. For many conventional lenders the problem with lending to the self employed person is documenting an applicant’s income. Applicants with jobs can provide lenders with pay stubs, and lenders can verify the information through their employer. In the absence of such verifiable employment records, lenders rely on income tax returns.

Source of Down Payment
Lenders expect borrowers to come up with sufficient cash for the down payment and other fees payable by the borrower at the time of funding the loan. Generally, down payment requirements are made with funds the borrowers have saved. If a borrower does not have the required down payment they may receive “gift funds” from an acceptable donor with a signed letter stating that the gifted funds do not have to be paid back. Grants may also be used for down payment. FDM Mortgage Loan Officers have access to various grant programs. Please be sure to ask them about possible grant programs that you may qualify for.

Select the Right Program

As a qualified lender FDM is able to able to offer a large array of loan products.  The best way to select the right product is to consult a Mortgage professional.  Call Us and we can work with you to find the program that best fits your needs.

Verify the information provided

Although lenders conform to standards set by government agencies, loan approval guidelines vary depending on the terms of each loan. In general, approval is based on two factors: your ability and willingness to repay the loan and the value of the property.Once your loan application has been received we will start the loan approval process immediately. Your loan processor will verify all of the information you have given. If any discrepancies are found, either the processor or your loan officer will troubleshoot to straighten them out.  This information includes:

1. Income/Employment Check – Is your income sufficient to cover monthly payments?  Industry guidelines are used to evaluare your income and debts.  Lenders may or may not add overlays to Agency guidelines.  FDM does not add overlays making it an easier approval process.
2. Credit Check – What is your ability to repay debts when due?  Your credit report is reviewed to determine the type and terms of previous loans. Any lapses or delays in payment are considered and must be explained.
3. Asset Evaluation – Do you have the funds necessary to make the down payment and pay closing costs?
4. Property Appraisal – Is there sufficient value in the property? The property is appraised to determine market value. Location and zoning play a part in the evaluation.
5. Other Documentation – In some cases, additional documentation might be required before making a final determination regarding your loan approval.

Improve Your Chances of getting Approved

1. Fill out your loan application completely. You may use our online forms to expedite the process.
2. Respond promptly to any requests for additional documentation especially if your rate is locked or if your loan is to close by a certain date.
3. Do not move money into or from your bank accounts without a paper trail. If you are receiving money from friends, family or other relatives, please contact us.
4. Do not make any major purchases until your loan is closed.  Purchases cause your debts to increase and might have an adverse affect on your current application.
5. Do not go out of town around your loan’s closing date. If you plan to be out of town, you may want to sign a Power of Attorney

SHOULD YOU APPLY FOR A MORTGAGE ONLINE OR IN PERSON?