Mortgage Terminology | Loan Down Payment Brochure | Bridge Loan

The Loan Application Process

Step # 1:

We will take 10 – 15 minutes of your time over the phone to discuss your individual situation and what you are looking to obtain from your mortgage inquiry with Evergreen Home Mortgage, LLC. We will offer advise and/or suggestions to you based on the information you provide. Our phone consultation is free of charge and is designed to show you how we work, what our loan process involves and what you should expect throughout the process and all the way through to the closing. Once you are comfortable with us and are ready to proceed, we will move to the next step.

Step #2:

We will need to take an additional 10 – 15 minutes to gather all of the pertinent personal information, including your job history, rental/ownership history, banking (asset) information, income, debts, etc. Once this information is obtained, we will type the application and send to you, along with other required stated and federal disclosures for signature before moving to the next step.

Step #3:

We will next pull a credit report and combine it with the other information you have provided. Next, we will run this information through our multiple underwriting engines so we may determine what loan program(s) you qualify for. Once we have determined the loan program(s) you qualify for, we will provide a detailed chart explaining it all. The chart will include the different program(s), interest rate associated with the program(s), principal and interest payment, estimated escrow payment and estimated total monthly mortgage payment. If you already have a particular price range you are looking in, we will provide payment information based on a few different sales prices within that range. If you are unsure of what you qualify for, we will determine the maximum amount you qualify for and will then provide payment information for multiple sales prices within that range. In conjunction with the payment breakdown chart, we will also provide a good faith estimate (GFE) and truth-in-lending (TIL) statement for your reference. These statements will break down the closing costs, total cost of credit and show the proposed interest rate for the different loan program(s). This information will be provided in paper format and we will also go over this with you to explain it all and answer any question you may have at that time.

Step #4:

After you are approved for a mortgage, you are ready to start looking for your dream home! Now that we know the price of the home you are qualified for, we will prepare a pre-approval letter for you. This letter will be provided to your Realtor so he/she may see that you are pre-approved for the mortgage loan. This extra step in the beginning will allow you to negotiate a contract more quickly than someone who is not pre-approved. You will have better success in getting a seller to agree to a contract with you if he/she/they know you are already approved with a Lender and are ready to proceed quickly.

Step #5:

Find your dream home. Work with your Realtor and locate the home that fits your requirement and will make you happy for years to come. Your Realtor will negotiate on your behalf and work through all of the contract legalities so your closing will go smoothly. Once you have a signed contract and a set closing date, you will let us know you are ready to proceed with the loan process.

Step #6:

We will update your information in our system and include the property address, sales price, seller paid closing costs, etc. and get you an updated good faith estimate (GFE) with more accurate figures based on the property you have chosen. We will then get all state and federal disclosures to you and will provide you a checklist of required documents we will need in order to process your loan. You will gather the information we need, sign and date the disclosure documents and return to our office.

Step #7:

Once we have the paperwork back from you, we will order the appraisal report and title work, set up the closing date/time with the Attorney’s office and will package and submit your loan file to our servicing Underwriter for approval. This process takes about 14 days. Once your loan file is reviewed by our Servicing Underwriter, they will issue a “conditional approval”. This means we will need to provide some additional documentation before they will give the final “clear to close”. Most times, the conditions are the title work from the Attorney or additional comments on the appraisal, but sometimes they ask for additional documentation from you. At that point, we will notify you and ask for the requested items. Once we provide the Servicing Underwriter everything he/she has requested and he/she has had time to review it, the final “clear to close” will be issued. Once we have the final “clear to close”, we are ready to gather everyone and go to the closing!

Step #8:

Meet at the Attorney’s office with the seller, the seller’s agent, your Realtor and a representative from Evergreen Home Mortgage, LLC. We are all there to make sure nothing goes wrong at the last minute. The Attorney will go over all of the documentation with you and the seller(s) and you will sign the appropriate paperwork to obtain the mortgage loan and transfer the ownership of the property. Once all documents are signed, the Attorney will congratulate you and give you the keys to your new home!

Step 9:

With keys in hand, you are now ready to load the moving truck and get everything moved into your new home. Congratulations and thanks for allowing us to be a part of your home buying experience!

What You Should Know if You are Buying a Home Before You Sell Your Current Home

The perfect scenario would be to sell your current home on Friday at 9am and purchase your new home at 10am. In most cases it doesn’t necessarily work out that way. However, there are some viable options to make the transition as smooth as possible.

Option One:

If your current home IS NOT already listed for sale, you can utilize the equity in your current home as a down payment for your new home.  To do this we would set up a Home Equity Line of Credit (HELOC) with no closing costs. The HELOC, combined with your 1st mortgage loan amount can be up to 95% of the appraised value of your home.

The equity line takes approximately 3 weeks to set up. If you anticipate closing on your new home within 4 weeks of closing on the HELOC, you would need to draw the amount needed for your purchase at the time of closing the HELOC.

Option Two:

If you currently have your home on the market for sale with a Realtor, you may do a Bridge Loan.  The interest rate on a bridge loan may be slightly higher than a HELOC and you can expect to pay closing costs for this loan. The bridge loan, combined with your 1st mortgage loan amount can be up to 80% of the appraised value of your home. You will make interest only payments and the loan term is set at 12 months. However, the bridge loan will be due and payable at closing on the sale of your current home.

Option Three:

Some people can qualify to purchase a new home without having their current home sold. A common way to do this is to set up a 1st and 2nd mortgage on the new home.  The 2nd mortgage would cover the mount of down payment you would have used, had you already sold your current home. PLEASE NOTE that most loan programs, in today’s market, are allowing you to only borrow up to 95% of the purchase price of a home. You will be required to bring 5% to the closing table, aside from the 1st and 2nd mortgages referenced above.

Example: If you were planning to use $150,000 from the sale of your current home as a down payment on your new home that costs $250,000, you would set up a 1st mortgage for $100,000, a 2nd mortgage for $137,500, and you would bring $12,500 (5%) of your own money to the closing table.

Option Four:

You may choose a combination of strategies from Option One and Option Three.  First, you would set up a HELOC on your current home, just to help with the expense of carrying two mortgages until your home is sold. Then, you would set up a 1st and 2nd mortgage on your new home. The 1st mortgage would be used solely for the long term loan and the 2nd mortgage would be for the amount that you expect to net after you sell your current home. When selling your current home, you may use the proceeds to pay off the 2nd mortgage that you obtained on the new home.

The program information referenced above is effective as of 08/25/08 and is subject to change.
Borrower must qualify to become eligible for any program we offer and loans are subject to approval.

Evergreen Home Mortgage, LLC is a GA Residential Mortgage Licensee #22880
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