As you begin the home-buying process and move towards getting pre-qualified for a home loan, it is important to be educated about the nuances of finding a mortgage that best suits your needs. At Willamette Valley Bank Home Loan Division, we are here to help guide you through the process one step at a time.
Where Should You Get Your Mortgage?
- Traditionally offer a suite of products and service the majority of their own loans.
- They are handling billions of dollars of mortgage originations per month, and typically, loan officers at these larger organizations aren’t served with the adequate flexibility or ability to get decisions quickly.
Community Bank/Regional Banks
- Community and regional banks like Willamette Valley Bank are well positioned in today’s mortgage world. Not having to rely on the availability of warehouse line money allows us to fund quickly and consistently every time.
- Being accountable to FDIC, State and Federal entities drives a focus toward making quality loans, with and for quality people.
- Not all regional or community banks have a flexible and robust mortgage origination platform, but for the ones who do you will be well served to consider them as an option.
- In the real estate boom of the early 2000’s, there were mortgage brokers on every corner.
- After a basic collapse of the real estate market, new licensing requirements for mortgage brokers and a more challenging arena in which to serve, there are very few true brokers still standing.
- Mortgage brokers don’t use their own funds or warehouse lines to facilitate a loan, but instead use wholesale conduits to underwrite and fund their clients’ loans.
- In simple terms, brokers rely entirely upon their wholesale relationships to perform for them and do not have the ability to control the experience.
Private Mortgage Banker
- There are many private mortgage ‘bankers’ that exist today. Many brokers from the boom become ‘net branches’ or saddled up with these organizations that use warehouse lines. The word ‘bankers’ is misleading as these entities, in large part, are not banks at all. They use warehouse lines of credit…similar to a credit card to fund their client’s loans.
- Credit cards do get maxed out, and so do warehouse lines. If the line is full, they can’t execute, or fund the loan on time, or at all.
- Warehouse lines are traditionally hard to get, and hard to keep, and require principals of these organizations to be well capitalized. In basic terms, the longevity and strength of these such organizations is directly tied to the financial strength of the principals of the organization.
- There are some great private ‘bankers’ around, especially in Oregon and might well be a good solution to serve your needs.
What Do You Need to Get Started?
It is important to provide your loan consultant with all requested documentation. Any missing documentation is likely to cause a delay in your loan approval process. To obtain loan approval, you will typically need to produce:
- Pay stubs covering most recent 30 days
- W-2 statements covering the past 2 years
- Bank statements covering the most recent 3 months
- 401K, IRA, or Mutual Fund accounts showing most recent transaction summary
- Stocks or certificates of deposit (copies)
- Purchase and sales agreement (copy)
- 12 months cancelled rent checks or the name and address of your current landlord (if applicable)
- Fully executed divorce decree (if applicable)
- Deed, hazard insurance policy, and most recent tax bill if you are refinancing (copies)
- A letter explaining any known credit problems or fluctuations in income
- If you are self-employed, paid by commission, or own real estate used for rental purposes you will need to produce:
- 2 years signed personal federal income tax returns including all schedules
- If self-employed through a corporation, the last 2 years’ corporate returns as well as a year-to-date profit and loss statement and balance sheet
If additional information or documentation is requested, please provide it to your loan consultant immediately.
Read all disclosures carefully and ask questions if you need clarifications. It is best to communicate all requests and clarifications in writing early in the loan process.
It is also important to ensure that the income you report on your application is the same income as that which is reported on your tax documents. Inform your loan officer of any past credit problems.