Wright Advice

Where do I go to get a loan? There are two types of lenders - Direct Lenders and Mortgage Brokers. Either can get you a loan for your home, but their roles are different.

Direct Lenders, like Wright-Patt, have money on-hand to lend. Many financial institutions, like credit unions and banks, are direct lenders. All the processing, paper work and holding of the loan occurs through the direct lender.

At Wright-Patt, your Mortgage Originator will work with you to find the right loan option for your unique situation.

A Mortgage Broker shops for loan options from multiple lenders. After the loan closes, the loan is passed to the lender you have selected. Brokers receive commissions from other lenders.

WARNING: BEWARE OF PREDATORY LENDERS!
Predatory lending occurs when a mortgage loan with unjustified high interest rates and fees is set up. The loan is not made in the best interest of the borrower, often locks the borrower into unfair loan terms, and tends to cause severe financial hardship or default.

Tips to avoid becoming a victim of predatory lending:

• Read and get copies of everything you sign in connection with your mortgage.
• Do NOT sign blank forms. Forms should be completely filled out with no blank boxes or spaces.
• Make sure the rate and terms quoted by your lender and/or broker are given to you in writing and do not vary from those presented at closing.
• Never falsely state or allow others to falsely state your income. You won’t have your dream home very long if you can’t afford to make the payments.
• If a deal seems to be too good to be true, it probably is!

To learn more about how to protect yourself from predatory lending, visit http://com.state.oh.us and search “What is Predatory Lending.” You can also visit HUD’s website at www.hud.gov. For specific information about predatory lending, go to the “Consumer Info” section and click on “Avoid Predatory Lenders.”

Source: Portions of this section, Predatory Lending, were provided by The Ohio Department of Commerce, Division of Financial Institutions, and Office of Consumer Affairs.

During the pre-approval step, lenders will verify your information including income, the amount of money in savings, current loans and debt, and more to determine the amount you are eligible to borrow. Your Mortgage Originators at Wright-Patt will also review your loan options to help you find the right mortgage for you.

The amount you qualify for is determined after they review documentation including:

Income Verification

• W2 or tax return
• Documentation of other regular forms of income, including second jobs, Social Security or disability, alimony, and child support
• Records of income from investments and dividends could be required

Debt Verification

• Car loans
• Credit card payments
• Student loans
• Alimony
• Child support
• Market value of all real estate you own, along with the amount of any rent collected, the mortgage on the property, and the monthly mortgage payments

Proposed Loan Information

• Type of loan you are applying for
• Desired term
• Down payment amount
• Loan amount
• Projected settlement date

Verification of assets

• Credit union / bank account numbers
• Credit union / bank account balances
• Copies of credit union / bank statements
• Vested interest in all retirement funds
• Face amount and cash value of life insurance policies in force
• If the money used to make the down payment was a gift, a letter needs to be submitted explaining that the money was a gift and no repayment is needed. It is best to consult with your mortgage originator about what documentation will be needed.
• Bill of sale for assets sold to provide funds for settlement

Automobile

• Make, model, year and value of automobiles owned

Employment

• At least two years’ employment history, including salary, bonuses, commissions, and average overtime pay
• Contact may be made with your employer to verify employment
• Tax returns, financial statements and a profit and loss statement if you are self-employed

Other Documents You May Need

• Divorce decree and property settlement agreement (if applicable)
• Military discharge documentation (DD-214)
• Driver’s license or Social Security card
• College transcripts
• Leases on rental properties
• Letters of explanation for credit issues
• Bankruptcy documents (if applicable)

Once an amount is determined, you'll receive a pre-approval letter. This letter helps you determine your price range. Keep in mind your total pre-approval amount and pre-approval letter does not mean that you have to purchase a house listed for that amount – you can find one for less.

When you look for a new home, work with your real estate agent to determine your price range. Have your real estate agent show you houses that fit your specific needs and wants. Be sure to consider your ability to afford the house now, and into the future. Think of things such as going from two incomes to one, or future expenses such as children. It is also important to remember the pre-approval amount is not necessarily the amount you and your budget can afford! You may consider looking at homes that are below your pre-approval amount if you feel it will be stretching your budget too thin.

As you look at homes, make a list of pros and cons for every house you visit and decide which features you can sacrifice, such as a smaller home size in exchange for a better location or a bigger yard for a smaller home.

When you find a home, your real estate agent will put an offer in writing and help you negotiate terms of the sale. For instance, you might be able to get a new furnace, roof, carpet or the current appliances in the home. The seller will have a specific time frame to either accept or reject the offer. If the offer is rejected, your agent will review the counter-offer with you. If you want to make another offer, they will help you do so. Once the seller accepts the offer or counter-offer, a closing date is determined, which is usually about 30 days later.

Here's what your Wright-Patt Mortgage Originator will now do for you:

• Final approval – Begin to prepare all the documents and re-check your documentation for the loan (depending on how much time has passed since pre-approval) once the offer is accepted and you or your real estate agent give them the final sale price.
• Appraisal – Order an appraisal of the property by a certified and licensed appraiser. This helps ensure the amount of your loan does not exceed the actual value of the house and the market in which the home is located. This step is for the protection of the lender.
• Title search – Have a search done on the title of the home. This is to make sure the home is not still listed in another owner’s name and the person you are buying from has the right to sell the home.
• Inspection – Have the home inspected to make sure there are no major problems with the home, such as structural, electrical or plumbing issues, that might cause the value to drop. This ensures your house is sound and safe.
• Closing – Once the items above have all been completed, a check for closing on the loan is prepared. Closing is a meeting between the buyer, seller and lender to sign all necessary documents to transfer the house to the buyer and pay the seller.