Buying a Home

The Mortgage Process

Mortgage lending guidelines are constantly changing. At Helping Hands, our licensed mortgage loan professionals will make sure you have current and accurate information while educating you through the process, making you a more successful homeowner.  

“Our mission is to better educate homeowners and, when appropriate, arrange the financing.”

Our goal is for you to obtain the best mortgage program for your situation. For purchase transactions, the first step to achieving your housing goal is to get a better understanding of how much you can afford.

Common Questions and Homebuying Resources

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What Can You Expect?

Here is a “play-by-play” of how a typical mortgage application and approval process works.

 

#1 Initial conversation and PlanFor our initial conversation, we will ask several questions and review various scenarios to determine your best options.  Think of this as taking a financial snapshot.  It’s a starting point.

Once we identify the best course of action, we will issue you a Loan Prequalification Certificate that is usually needed when making an offer on a home.  We’ll also discuss the merits of obtaining a formal loan approval certificate.
#2 ApplicationOnce you have an accepted offer on your new home, we’ll prepare the mortgage application and provide you with the proper disclosures required by law.

An official mortgage app is complete when we have these 6 elements:

1.     Verified I.D

2.    Verified Income and assets

3.    Credit Report

4.     Purchase property address

5.    Estimated value of the purchase property

6.     Sought after mortgage loan amount

Once the Application is approved, it will go into Underwriting.
#3 UnderwritingThe underwriter is the person who examines your application and documentation to determine whether the loan meets the lender’s rules and guidelines. The underwriter analyzes a borrower’s finances to determine if he or she is an acceptable risk for the mortgage lender to guarantee the funds to purchase the home.

In Underwriting the underwriter will:

- Make a title search

- Get appraisal on property

- Arrange homeowner’s insurance

Title Search:  We will order a title search to make sure the ownership of the property is clear. A title search identifies any liens that have been recorded against the property, searches the records at the courthouse to make sure the seller of the property has sole ownership and the legal right to sell the property, and verifies that all title and deed conveyances are in order.

Appraisal: The appraiser’s job is to determine the fair market value of the home you are buying or refinancing. Appraisers do this by verifying the physical characteristics of the house and land. This will be done through a personal inspection of the property to verify its condition, square footage, room count, construction materials used, and acreage. The appraiser contacts the listing agent for a purchase. The cost of an appraisal is usually in $500-$550 range for a single-family home.  This amount must be paid in advance, as appraisers are independent of the loan process.

Homeowner's Insurance: You’ll need to arrange homeowner’s insurance coverage in advance of the purchase and it is advisable to gather quotes at the beginning of the process.  We’ll explain what type of coverage is required.
#4 Your CooperationBecause gathering all the documentation and reports involves many people (such as title companies, appraisers, closing attorney, and Realtors) your cooperation is most appreciated.  The key is for you to provide any requested documentation as soon as possible.  This saves a lot of time on the back end of the process.  “We hold your hands not just shake them.”  
#5 Loan ApprovalThe underwriter will issue a conditional approval which will list the remaining items needed for the lender to issue funds to close the loan.  Often the underwriter will have questions regarding the appraisal, title, or information provided by the borrower.  We work closely with all parties to satisfy any conditions.
#6 "Clear-To-Close”Once we have satisfied any remaining conditions, the underwriter will issue a "clear to close" which means we may then schedule your loan closing.
#7 ClosingOnce the underwriter has cleared your file and the title search and appraisal have been reviewed and accepted, a closing can be scheduled. A closing attorney (or closing agent) will conduct the closing process. The attorney will prepare all the necessary documentation to complete the purchase.  During the closing you are asked to read and sign many documents concerning the transaction. The closing attorney explains each document, but be sure to ask questions if there anything you do not understand. You will receive a copy of all the documents that you sign at the closing.
#8 The Most Important StepNow that you own your new home, we enter the next and most important part of our relationship.  Our goal is to continue to build upon our trusted relationship with you.  We'll stay in touch and occasionally check-in to make sure all is ok.  We also encourage you to contact us if you ever have any type of financing questions or need any other business services.  We have an extensive referral network and are always happy to refer you to other competent caring professionals. 

And, of course, we are never too busy to help any of your friends and family members with their purchase, refinancing, or reverse mortgage needs.  Just give us a call and we'll take great care of them.
To be connected to a Giver's Mindset loan officer regarding the purchase process, submit the form below. Our loan officers will assess your needs and will create a custom roadmap for success. Congratulations on taking the first step!

First Name*

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Email*

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Our Helpful Purchase Mortgage Document Checklist

 

To better serve you and to give you more accurate information, below are the typical documents that we would like to review:

Income Verification- Recent paystub(s) showing the past 30-days of employment

- Most recent federal tax returns for two years (all pages, all schedules)

- Most recent W2’s for two years

- For self-employed, please contact us

- Certificate of Eligibility and DD-214 (for VA loans)
Assets – Where Will Your Cash Come From?Verifying and sourcing the cash to be used for the purchase of your new home is a critical step and may cause stress if not fully understood. Examples of sources of borrower funds include:

- Checking/savings

- Investment accounts (stocks, bonds, mutual funds)

- Loans or withdrawals from retirement accounts such as a 401(k)

- Gifts (must be documented)

- Down Payment Assistance Programs or Grants (Call for more information.)
Mortgage Credit ReportWe will review your mortgage credit report with you. To do so, we will need your:

- Current home address

- Legal name

- Date of birth

- Place of birth

- Social security number

A mortgage credit report is a more detailed report than the available free consumer credit reports.  The credit scores may be different for various reasons.  Also, the mortgage credit report also checks for fraud and public records.  We will help you understand your credit report and make sure there are no errors on your report.  Studies show that over 20% of credit reports have wrong information.
IdentityAll lenders require verification of identity at time of application and when your loan closes. Please provide the following:

- Driver’s license or photo I.D.

- Social Security card (if available)

- Current and former address for prior two years

- Your place of birth

 Our team has closed thousands of purchases. The key to a smooth transaction is organization and communication. We help each of our clients to be well prepared, to gather the necessary documentation, and to understand the mortgage application process.

Please contact us to better understand the buying mortgage process.

Down Payment Requirements

A down payment is an upfront payment made when purchasing a home, expressed as a percentage of the home's total purchase price. It serves as a financial commitment that homebuyers make to secure their investment. Down payment amounts can vary based on many factors from loan programs to credit qualifications. It will also depend on whether you’re buying a primary residence, secondary residence, investment property, a multi-unit property, or if you are a first-time homebuyer.

 

The down payment requirement for a conventional loan for primary residences are typically 3%-5%. An FHA loan only requires a 3.5% down payment. 

 

You may even be able to put 0% down, if you qualify for either a USDA loan or VA loan. Both of these government backed programs offer 100% financing for qualified borrowers. 

How Much Should You Put Down On Your House?

The only right answer: It Depends. The ideal down payment amount depends on your specific objectives and current financial circumstances. There's no universal formula that fits all. To determine the right down payment, it's crucial to assess how it will impact your monthly payments realistically.

We encourage you to get in touch with us so that we can provide you with a comprehensive understanding of the available options tailored to your unique situation.

Can I get assistance with my down payment?

There are Down Payment Assistance (DPA) programs for qualified borrowers. These programs are provided through a government agency or private organization to make home buying more attainable. We are a proud RIHousing broker partner. 

Why do people say you should put at least 20% down?

This is one of the most harmful myths regarding down payment, because it prevents the homebuying process before it starts. We will walk you through the process and provide you different examples and the associated cost for different down payment options. 

May I use a gift to pay part or all my down payment?

Depending on the loan program, gifts can be used to meet the cash requirement towards the down payment and closing costs. Gifts must be accompanied by a letter specifying that no repayment is expected, and the source of the gift must verified by usually providing copies of the gift donor’s bank statements.

Our friendly suggestion is to allow us to share the guidelines for gifting with the person who will be giving you the gift. This will minimize any miscommunication or misunderstanding between you and the donor.

Your Credit Score

Your credit score is a critical factor when it comes to securing a mortgage. It plays a pivotal role in determining your eligibility for a loan, the interest rate you'll receive, and the overall terms of your mortgage. Lenders use your credit score to assess your creditworthiness and your ability to manage and repay debt. A higher credit score typically translates to more favorable loan terms, including lower interest rates and reduced fees.

 

At Helping Hands Community Partners, we understand that not everyone has a perfect credit score, and that's why we're here to help. We offer no-cost credit strengthening assistance to our clients. Our team of experts can work with you to improve your credit profile, which may increase your chances of qualifying for a mortgage with better terms. We believe that homeownership should be within reach for everyone, and your credit score shouldn't be a barrier.

 

Feel free to reach out to us to learn more about how we can assist you in improving your credit and navigating the mortgage process with confidence. Your dream of homeownership is our priority, and we're here to guide you every step of the way.

Why is My Mortgage Credit Score Different Than My Free "on-line" Score?

Many borrowers are confused when they discover that the credit score used by a mortgage lender is not the same as the consumer credit score they may have received from one of the free on-line credit reporting offers. It can be quite frustrating to learn that a lender is using a lower credit score than you feel you have earned!

The primary reason for the credit score differences is a mortgage credit report is based off a maximum score of 850 whereas some consumer credit report scores are based on a maximum score of 900 - 950. A mortgage lender uses unique scoring formulas that are weighted for mortgage-related factors. 

The following factors are taken into consideration to build your score:

  • Whether you make payments on time
  • How you use your credit
  • Length of your credit history
  • Your new credit accounts
  • Types of credit you use

Mortgage Calculator

DISCLAIMER: The information provided by the calculator above is for illustrative purposes only. The figures shown are hypothetical and may not be applicable to your individual situation. Consult a financial professional prior to relying on the results of this calculator. The calculated results are intended for educational purposes only and accuracy is based on factors that may not be represented in calculator.

RI Licensing Exempt, NMLS #1553939. We arrange but do not make mortgage loans.

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