Your home financing process checklist Step Description

Your home financing process checklist
As you prepare to purchase a home or refinance your loan, it’s important to know what to expect along the
way. Here, we’ve outlined some of the general steps in the home financing process.
Step Description Timing
Initial consultation
• Speak with your home mortgage consultant about your home financing needs,
current situation, and goals. From there you can determine next steps.
• Inquiry stage: You provide information on your income, assets, liabilities,
and any real estate you own.
• Consultation stage: In addition to the above information, you may also provide
written consent(s) to pull your credit report(s).
• Your home mortgage consultant will share information on loan products based on
your needs and credit profile.
Apply for
a PriorityBuyer®
preapproval1
• Real estate professionals and the home sellers they represent often require a
preapproval which is a confirmation of your credit-worthiness and your ability to
purchase for a given price.
• A preapproval is based on our preliminary review of credit information only and
is not a commitment to lend vs. a prequalification which only estimates how
much you may be able to borrow to buy a home.
• A Wells Fargo PriorityBuyer® preapproval letter will elevate your home buying
status and strengthen your offer. Once you have it, you’re ready to shop for
a home with confidence.
•To get preapproved you’ll need to fill out an application, provide some initial
documentation (see next step), and provide your consent for a credit check.
Provide all
requested
information and
documentation
• Your home mortgage consultant or home loan processor will tell you what
documents we need from you to underwrite and approve your mortgage. Some
of the initial documentation may include W-2s, tax returns, pay stubs, and bank
statements. Refer to the last two pages of this checklist for a more complete list of
documents you may need to provide.
• It’s important to submit the required documentation as quickly as possible to ensure
a smooth review process and on-time closing. All information must be accurate and
complete, and any delays in receiving your information may affect your closing date.
• If you have a home equity loan or line of credit and are refinancing your first
mortgage, subordination of your home equity loan or line of credit is required
(unless you choose to pay off the loan or close the line of credit). Subordination
means that the lender who holds the home equity loan or line of credit agrees to
have their loan remain in second position while the first mortgage is refinanced.
It’s very important to let your home mortgage consultant know if you have a home
equity loan or line of credit because additional time may be required to refinance
your mortgage depending on the subordinating lender’s
documentation requirements.
Find your home
and make an offer
• Work with a real estate professional for valuable direction and market experience.
• Your real estate professional will use your PriorityBuyer preapproval letter to
negotiate with the seller on your behalf - it shows everyone that this is a serious offer.
(Purchase or refinance)
Home search
(Purchase)
(Purchase or refinance)
(Purchase)
1. A PriorityBuyer® preapproval is based on our preliminary review of credit information only and is not a commitment to lend. We will be able to offer a loan
commitment upon verification of application information, satisfying all underwriting requirements and conditions, and providing an acceptable property, appraisal,
and title report. Preapprovals are subject to change or cancellation if a requested loan no longer meets applicable regulatory requirements. Preapprovals are not
available on all products. See a home mortgage consultant for details.
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Home search (continued)
Step Description Timing
Sign the
purchase contract
• Regardless of who draws up your purchase contract (a real estate attorney, title
company, etc.), they should be fully aware of important negotiating points or
contingencies to include in the contract. A signed and dated purchase contract
is required for the appraisal to be completed.
•You’ll want to make sure you include a contingency in your purchase contract
that lets you renegotiate the contract. For example, if a major defect is discovered
during home inspection, you’ll be able to renegotiate the terms of the contract to
address those defects.
• You may be required to advance a “good faith deposit” or “earnest money”
when you sign the contract. This payment will be considered part of your down
payment if you’re making one.
•When determining the closing date on your offer, please consult your home
mortgage consultant.
Get a home
inspection
• We strongly suggest you hire an independent engineer or home inspector to
evaluate the condition of the property. Sales contracts are usually written “as is,”
so it’s important to know what you’re buying.
Finalize the
application
• When you finalize your application and mortgage choice, carefully review the
terms and conditions, and be sure to ask your home mortgage consultant about
anything you don’t fully understand.
Lock or float
the loan pricing
• You can choose to lock in your range of interest rates at application or allow it
to “float” with the market. If you choose to float your range of interest rates, you
may lock it in at any time up to 10 business days prior to your closing.
Receive and review
the disclosure
package
• Within 3 business days of your application, you will receive a package
of disclosures, including a Good Faith Estimate of Closing Costs and a
Truth-in-Lending Disclosure, which will show your annual percentage rate
(APR), and other information about the financing you have chosen. It’s
important for you to review these materials and confirm that the terms shown
match your expectations.
• Some of these documents may require your signature and must be returned to
us. It’s important to submit the required documentation as quickly as possible
to ensure an on-time closing. Contact your mortgage consultant with any
questions.
• After you have received initial disclosures, you’ll be expected to pay certain fees,
which vary by area and transaction type.
• You will also continue to work with a mortgage representative to see you
through to the closing of your loan.
Appraisal and title
search are ordered
The appraisal is an opinion from an impartial third party that indicates how
much a property is worth. The appraised value will be used as collateral when
underwriting your loan.
• Wells Fargo will order an appraisal and follow up with your closing agent
(usually your attorney or a title agency representative, depending on your area)
to ensure that a title commitment is ordered.
• If you are refinancing, you or someone else may have to be available to give the
appraiser access to all rooms in your home.
• When the appraiser contacts you to schedule the appraisal, they will provide an
estimate on timing, what documentation might be needed, and what will take
place during the process (ex: measuring the property, taking interior/exterior
photos, inspection of all rooms). This same information will be covered with you
when the appraisal takes place.
• You will receive a copy of the completed appraisal at least three days prior to
closing, unless you waive this review period, in which case you will receive a
copy at closing. If the appraisal does not meet value requirements or comes
back too low, you should follow-up with your mortgage consultant to discuss
your options (ex: putting more money down, contacting the sellers to lower the
sales price, looking for another property, or researching a different loan product
or program that would support the lower appraisal value).
(Purchase)
(Purchase)
(Purchase or refinance)
Mortgage application and process
(Purchase or refinance)
(Purchase or refinance)
(Purchase or refinance)
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Mortgage application and process (continued)
Step Description Timing
Receive
a welcome call
(Purchase or refinance)
Receive a
commitment letter
and
Meet all
requirements
(Purchase or refinance)
•You can expect to receive a welcome call from your Wells Fargo home
loan processor, who, along with your home mortgage consultant, will be
your primary contacts. .
•He/she can help answer your questions and is responsible for:
- Providing you with the status of your mortgage application
- Ensuring you have all necessary contact information
- Requesting any outstanding documentation or other items to facilitate
your approval
- Confirming and managing your closing date
- Explaining the customer experience survey
• A commitment letter contains the terms and conditions under which
Wells Fargo will close your loan.
• Receipt of a commitment letter means your mortgage is approved, subject to the conditions in the letter, and that you are almost ready to close.*
• Carefully review the commitment letter and act on outstanding items, because
we cannot close your mortgage until all approval conditions are satisfied.*
These items may include, but are not limited to:
- Any final mortgage conditions. For example, we will need to see proof of
homeowners insurance.
- Copy of a paid receipt for homeowners insurance (provided by a licensed
insurance agent)
- Copy of a paid receipt for flood insurance, if required
- Evidence that required inspections have been completed and passed
-T
he Certificate of Occupancy which states the home is suitable for
occupancy. Certificates are typically issued by a local government agency or
building department.
* For new construction purchase loans, documentation and timing requirements
may vary. Check with your home mortgage consultant for additional information.
Receive a preclosing
Truth-In-Lending
Disclosure
Closing
(Purchase or refinance)
•You’ll receive an updated Truth-In-Lending Disclosure (TIL) before closing.
After receiving the TIL, there is a three business day waiting period before your
loan can close. The TIL will have your annual percentage rate (APR) and the
amount of your finance charges. If you have questions about this disclosure,
contact your mortgage consultant immediately. Any further changes to the APR
and finance charges may require you to be sent another TIL and incur another
three business day waiting period, which may impact your closing date.
A closing date is set
and
Your HUD-1
and closing package
are prepared
• All involved parties need to arrange a date, time, and location for closing.
• Your closing agent will have a copy of the HUD-1 Settlement Statement, which
shows the costs related to closing.
•Wells Fargo must provide you with certain disclosures before your loan can
close, which may impact your closing date.
Obtain your
certified or
cashier’s check
•You’ll be notified of the exact amount of money you’ll be required to bring to
closing (payable only by certified or cashier’s check).
• Funds may be required if you are refinancing.
Attend your
closing
• At closing, your closing agent will review and explain all of your mortgage and
closing documents.
• Most customers will establish an escrow account at closing that will be used to
pay future real estate taxes, homeowners insurance, and if applicable, mortgage
and flood insurance. We’ll collect a portion of the funds required to make these
payments with each monthly mortgage payment you make and deposit the
funds into your escrow account. We’ll use the funds in the account to make your
tax and insurance payments by the due dates.
(Purchase or refinance)
(Purchase or refinance)
(Purchase or refinance)
Note: On occasion, if you
cannot attend, a power of
attorney may be arranged
in advance. Some refinances
can be done by mail
(restrictions apply).
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Note: Prior to closing, inform your home loan processor or home mortgage
consultant if you would prefer to make tax and insurance payments on your own.
But understand that many mortgages require an escrow account.
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Step Description Timing
Select your
preferred payment
method
• At closing, you will receive instructions on the amount and timing of your first
payment. You’ll also receive a document explaining your choices of automatic
payment options to help with budgeting. These payment options are free, and
you can choose to pay monthly, weekly, twice per month or every two weeks.
• Choose your preference for automatic payments at closing or any time after.
You may also make payments online at yourwellsfargomortgage.com or
by check.
Open your
mortgage
account online
• In the weeks after your closing, simply go to yourwellsfargomortgage.com and follow the instructions to view your mortgage account information online.
This site provides free, secure access to your mortgage information.
We’re here to
help you
Feel free to contact your home mortgage consultant or your customer service team if you:
• Have questions, concerns, an issue, or if you can’t make a mortgage payment(s)
• Want to refinance to change your rate or term
• Want to access your home equity
• Are moving or buying a vacation home or investment property — your mortgage
consultant can help you finance a home anywhere in the United States
• Have a friend or family member who needs home financing — your mortgage consultant can also help them finance a home anywhere in the
United States.
Mortgage services
(Purchase or refinance)
(Purchase or refinance)
(Purchase or refinance)
Thank you
We hope you find this checklist useful as you progress through the home financing process. It’s important to note,
the steps outlined here are general and may not include all steps specific to your home financing situation.
Your home mortgage consultant will advise you of any differences that may apply to your specific mortgage and
circumstances. Certain state requirements may also apply and impact the steps specific to your mortgage.
Let us know what you think
Shortly after closing on your home mortgage, you will receive a survey with questions about the service you received
throughout your home financing experience. We would appreciate you taking the time to complete and return it.
We value your feedback and hope you’ll use us again in the future and recommend us to friends and family.
Wells Fargo is dedicated to providing you with an outstanding experience
We are committed to providing an outstanding experience to every customer, every time. If you
feel you aren’t getting the service you need, please contact us at wellsfargo.com/findcontact or
877-510-9896, so we can address your concerns right away.
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Mortgage documentation
We will notify you about the specific documents required for us to underwrite and approve your mortgage based on your specific
circumstances and mortgage choice. These may include some or all of the documents listed below. It’s important that all pages of the
documentation are included, even if a page is blank. Please be sure to get your documents to us as soon as possible. Delays in receiving your
information may impact your loan closing date.
Income information
Additional property ownership
Most current pay stub(s) for all jobs and borrowers showing
n year-to-date information.
n 1 month (full 30 day period)
If hand written pay stubs (non-computer generated),
n provide payroll register from employer
Most recent federal tax returns (1040s including
n all schedules)
n One year
n Two years
n Three years
n If self-employed, two years required
n Most recent W-2s
n Two consecutive years
Written explanation if employed less than two years or a
n gap in employment during the last two years
n Self-employment business documentation
n If 1120S, two years required and two most recent
1120S returns with K-1s
n If 1065, two years required and two most recent
1065s returns with K-1s
n If 1120, two years required and two most recent
1120 returns
Pension award letter and most recent two months of bank
n statements to show proof of receipt
Social Security award letter and most recent two months of
n bank statements to show proof of receipt
Latest mortgage statement for all properties you
n own, including first, second, and third mortgages,
and any home equity lines of credit
n Real estate tax bill(s) for all properties you own
Copy of homeowners insurance binder or bill for all
n properties you own (including flood insurance, if applicable)
Verification for applicable homeowners association (HOA)
n dues for any properties you own
n Copies of any current leases for rented units that you own
If using rental income to qualify, two years of most recent
n 1040s including all schedules
Business information (if applicable)
Letter from other business owners confirming access to
n business funds for personal use.
n Year-to-date profit and loss statement and balance sheet
n Y
ear-to-date balance sheet and income statement
(conforming, non-conforming, VA, FHA)
n Evidence that business pays expenses
n 12 months of business bank statements or 12 months
of cancelled checks from business account
Asset information
n M
ost recent two months of statements for the
following account(s):
n Checking
n Savings n CD
n Investment n Retirement
I
f
another
party
is
listed
as an owner for a bank account
n and is not listed on the 1003, a joint access letter will
be required
Terms and conditions of withdrawal for all retirement accounts
n n P
roof of liquidation and deposit into bank account
may be required
D
ocuments
for any large deposits outside of payroll or gift funds
n n Signed and dated letter of explanation and
documentation supporting the source of funds for
any large deposits
Verification
of gift funds source
n
n Full 30-day transaction history from the gift fund
bank account
n Verification of gift fund destination
n F
ull 30-day transaction history from the gift fund
bank account where gift funds were delivered
(needed after transaction is complete)
n Signed and dated gift letter
5
Credit and liabilities information
Other information
nJ
udicial decree for any obligations due to legal action (ex:
child support, alimony/spousal maintenance)
nC
omplete bankruptcy discharge papers and all schedules,
if applicable
n Letters of explanation, if applicable
n Inquiries (180 days for conventional and 90 for
government loans)
n Late payments
n Collections
n _
_________________________________________
n _
_________________________________________
n Verification of rent payments for utilities, rent, and car
n 1
2 months of relevant bank statements or cancelled
checks (front and back)
n Verification that another party pays student loan payments
n 1
2 months of relevant bank statements or cancelled
checks (front and back)
n Verification that another party pays auto loan payments
n 1
2 months of relevant bank statements or cancelled
checks (front and back)
n T
wo forms of legal identification, such as a driver’s license
and a Social Security card
n H
omeowners insurance information (including flood
insurance, if applicable)
n Contact information, including name and phone number, for:
n Employer
n Real estate professional
n Attorney
n Homeowners insurance agent
n Accountant
n Property management company
n Relocation coordinator
n Landlord
n C
opy of all pages of trust agreement or signed trust
certification, if applicable
n Copy of Power of Attorney, if applicable.
f using any documents printed from the internet, the full
n I
URL address must be printed on the document
n _
_____________________________________________
n ______________________________________________
n ______________________________________________
We are required to collect and verify several different types of information from all customers, even if you
have purchased or refinanced a loan with Wells Fargo in the past.
For a complete explanation of documents required in the mortgage application process,
visit our online document library.
To learn more about the home financing process, watch this short video at
www.wellsfargo.com/mortgageprocess.
Information is accurate as of date of printing and is subject to change without notice.
Wells Fargo Home Mortgage is a division of Wells Fargo Bank, N.A.
© 2014 Wells Fargo Bank, N.A. All rights reserved. NMLSR ID 399801.
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