Mortgage (Home Loan/ Loan against property)
Mortgage means loan against property or loan to buy property. Creditors provide loan against collateral/ property and the ownership is transferred to the and the borrower cannot sell that property until the loan is paid off, however the possession lies with borrower and he/ she can use that. It is secured loan because if borrower fails to repay the loan the creditor can sell the property to recover the money.
Type Of Mortgage
1- Fixed Rate Mortgage(FRM):-
A fixed-rate mortgage (FRM), often referred to as a “vanilla wafer” mortgage loan, is a fully amortizing mortgage loan where the interest rate remains the same through the term of the loan, as opposed to loans where the interest rate may adjust or “float”. As a result, payment amounts and the duration of the loan are fixed and the person who is responsible for paying back the loan benefits from a consistent, single payment and the ability to plan a budget based on this fixed cost.
2- Variable-Rate Mortgage(VRM):-
A variable-rate mortgage, adjustable-rate mortgage (ARM), or tracker mortgage is a loan with the interest rate on the periodically adjusted based on an index which reflects the cost to the lender of borrowing on the credit markets. The loan may be offered at the lender’s standard variable rate/base rate.
“Pre-qualification” occurs before the loan process actually begins, and is usually the first step after initial contact is made. In a pre-qualification, your Mortgage Lender gathers information about the income and debts of the borrower and makes a financial determination about how much house you may be able to afford. Different loan programs may lead to different values, depending on whether you are qualified for them, so be sure to get a pre-qualification for each type of program you are suited for.
This usually occurs between 1st and 5th day of the loan.
You, the buyer, now referred to as a “borrower”, complete a mortgage application with a loan officer and supply all of the required documentation for processing.
Various fees and down payments are discussed at this time and the borrower will receive a Good Faith Estimate (GFE) and a Truth-In-Lending statement (TIL) within three days which itemizes the rates and associated costs for obtaining the loan.
Opening The File
This occurs between 3rd and 10th Day.
At this time, as your lender, we would order a property appraisal, property survey and credit reports, mail out requests for verifications, if necessary, for employment (VOE) and bank deposits (VOD) and any other documents needed for processing of the loan.
All information supplied by you (the borrower) is private, secure and reviewed at this time. Then a list of items not yet received is compiled.
This occurs between 5th and 25th Day of the loan.
The “processor” reviews the credit reports and verifies your (borrower’s) debts and payment histories as the VODs and VOEs are returned.
If there are unacceptable late payments, collections for judgment, etc., a written explanation is required.
The processor also reviews the appraisal and survey and checks for property issues that may require further discernment. The processor’s job is to put together an entire package that may be underwritten by your lending officer.
“Lender underwriting” occurs between 15th and 25th Day.
The underwriter is responsible for determining whether the combined package passed over by the processor is deemed as an acceptable loan.
If more information is needed, the loan is put into “suspense” and you (the borrower) will be contacted to supply more documentation.
“Mortgage insurance underwriting” occurs when the borrower has less than 20% of the loan amount to put towards a down payment. At this time, the loan is submitted to a private mortgage guaranty insurer, who provides extra insurance to the lender in case of default.
As above, if more information is needed the loan goes into suspense? Otherwise it is usually returned back to us – your mortgage company within 48 hours.
“Pre-Closing” occurs between 20th and 30th Day.
During this time the title insurance is ordered, all approval contingencies, if any, are met, and we would schedule a closing time for your loan
Closing usually occurs between 30th and 45th Day of the loan.
At the closing, we “fund” your loan for you with a cashier’s check, draft or wire to the selling party in exchange for the title to the property.
This is the point at which you, the borrower, finishes the loan process and actually buys the house.
- Identification Proof : Driving License or Passport
- Residence Address Proof : Utility Bill(Gas Bill,Electric Bill or Phone Bill)
- Income Proof : Last 6 months Bank Statement,check stubs or pay stubs
- Company Profile
- Management Profile
- Last Three Years’ Audited Financial Statements
- Certificate of Incorporation of the Company.
- Copies of MOA & AOA.
- Copy of Business Bank Statement.
- Detail of Existing Loans from Other Banks
- Project Feasibility Report.