The Loan Process
There's no doubt that getting a mortgage loan is a complicated process. You wouldn't be here on our website if you could fill out a simple loan app and get an excellent loan funded the same day. But Rainbow Mortgage Inc. does the heavy lifting so you can concentrate on your life rather than the mortgage loan.
Getting a loan involves four major steps.
Step one: determine how much you can borrow
A couple of factors determine this amount. What kind of monthly payment are you looking for? And given your unique credit and employment history, income and debt, and goals, how much will a lender loan you? Use the calculators on our website to determine your monthly payment amount. We'll also help you through different scenarios by asking a few simple questions. Because lender guidelines are fairly standard, we can give you a good idea of how much you can borrow after a short conversation.
Step two: pre-qualify for your loan
This is where the rubber meets the road and Rainbow Mortgage Inc. can really save you money. You will provide details on your current job, your assets, and your residence history. You'll supply your employment, asset, and residence history information. We will get your credit report and score (only after you give your permission, of course). We will go over all this information then will provide a pre-qualification letter. Your agent should use your pre-qual (as they may call it) to make the best offer on the home you choose. While you're picking out your new home, we are researching the best loan program for you.
Step three: apply now! We make it easy
Once you have made an offer and it's been accepted, it's time to apply for the loan. Applying for a loan couldn't be much easier; you can apply from the comfort of your home right here on our site. When the time is right, we will order the appraisal of your new home.
Step four: your loan is funded
The real estate agents will find a title company to handle the "funding" of the loan and closing of the sale. We'll work with this company to ensure the papers your lender requires are available, and you'll likely sign all these papers at their office. We coordinate with this company on your date of closing. Because you will not need to coordinate this process, you can think about the move, if you're going to repaint, carpet, and all the details of moving into a new house.
You've answered a few questions, provided lots of information, applied , and before you know it, you'll be moving! We take care of the loan details so you can focus on finding your new home.
Fixed VS Adjustable Rate
Why Title Insurance?
Real Estate Glossary
Broker VS Loan Officer
When you apply for a mortgage , you should know the difference between a mortgage broker and a loan officer. As both a mortgage broker and lending officer will help you fund your new home, it's easy to confuse them. Yet knowing how they differ is beneficial to the mortgage loan process.
Mortgage Brokers
A mortgage broker is an individual or company that is an independent agent for both the mortgage loan borrower and the lender. A mortgage broker facilitates things between you and your lender, which can be one of the following: a credit union, bank, trust company, finance company, mortgage corporation or even an individual investor. Acting as a facilitator between you and your lender, your mortgage broker can match you with a credit union, bank, trust company, finance company, mortgage corporation or even a private investor. A mortgage broker can consider your numbers to determine which lender is the best fit for you. Your broker will submit your loan application to one or more lenders, and works with the lender of choice until closing. The broker is given a commission from the borrower at closing.
What is a Loan Officer (Mortgage Banker)?
Loan officers are representatives of a specific lending institution (such as a bank) who process mortgages and other lending programs originated by their company alone. Although a mortgage banker may offer quite a variety of loans, they will be programs from that lender alone.
Also called a "loan representative" or "account executive," a mortgage banker represents the borrower to the lending institution. From finding a loan program to closing, a mortgage banker can help you through the process. Mortgage bankers may be given a commission or salary for their services by their employers.
Credit Scores
Buyer DON'Ts
9 Steps to Ownership
Pre-Approval
Are you pre-qualified or pre-approved for a loan?
Before you begin to shop for a new home, you should set up a time to meet with me so we can figure out how much you can afford. This will put you in a better position as a buyer. That’s when it is important to understand the distinction between being pre-qualified for a loan and pre-approved for a loan. The difference between the two terms will be crucial when you decide to make an offer on a house.
To get pre-qualified for a loan, I will collect information about your debt, income, and assets. We’ll look at your credit profile and assess goals for a down payment and get an idea of different loan programs that would work for you. I will issue you a pre-qualification letter indicating the amount you are pre-qualified to borrow.
It is important to understand that a pre-qualification letter is just an estimate of what you are eligible to borrow, not a commitment to lend. Getting pre-approved for a loan gives you competitive advantage when the time comes to bid on a home because you have been approved for a loan for a specified amount.
To get pre-approved, you will complete a mortgage application and provide me with various information verifying your employment, assets and financial status such as W-2 forms, bank records and credit card statements. We’ll review your mortgage options and submit your application to the lender that best meets your needs. Once the application process is complete you will receive a pre-approval letter indicating the amount your lender is willing to lend you for your home.
A pre-approval letter is not binding on the lender; it is subject to an appraisal of the home you wish to purchase and certain other conditions. If your financial situation changes (e.g. you lose your job), interest rates rise or a specified expiration date passes, your lender must review your situation and recalculate your mortgage amount accordingly.
Gifts as Downpayment
When to Refinance
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How Much House?
How much can you afford?
Deciding how much house you can afford is a personal decision. Many factors come into play. How much can I borrow? How much can I put toward my down payment? What size monthly payment can I afford?
There are no black and white answers to these questions. Its a matter of give and take. If you plan on a 30 year mortgage, you can probably make a lower down payment (or perhaps no down payment at all) and still manage the monthly payments. If, on the other hand, you plan on a 15 year mortgage, you'll probably want to make a larger down payment to keep your monthly payments in line with what you can afford.
How large a down payment can I make?
Many buyers look at their cash on hand as their only source for their down payment. This simply is not the case. One way to fund or partially fund a down payment is by using a gift. Parents, grandparents and other family members are often eager to help by making a cash gift toward the purchase of your home.
There are also down payment assistance charities that can help you. And, of course, if you are selling a home, the equity you've built up can be applied to your down payment.
But these are not your only options. We can help you explore all your down payment options, including low down payment and 100% mortgage financing options that might be right for you.
What size monthly payment can I afford?
When determining what size monthly payment you can afford, you'll want to consider what other monthly expenses you have. Tangible expenses such as car payments, day care and utility bills, all play a role in how large a monthly payment you can afford.
There are also the intangible expenses or lifestyle expenses that you'll want to consider. Things such as dining out, travel and when you buy your next car can effect how much you can afford. Are you willing to curtail or delay some of these expenses in order to afford a larger monthly payment?
How much can I borrow?
This is a question you'll want to get answered before you begin your home search. This is something that we're here to help you with. Our mortgage calculators will help you see how your down payment, monthly payment and the amount you borrow are all interrelated.
We can answer any questions you may have about the mortgage process. But the best way we can help is by getting you pre-qualified for a mortgage loan. To get started, simply complete the form below to let us know a good time to contact you. We look forward to helping you buy your dream home.
Documenting Assets
Refinancing Options