Obtaining a loan can be complex and confusing for most people. Our NC realtors at Smoky Mountain Getaways can help guide you through this process from recommending lenders to funding at closing.

Be Prepared

Gather Your Financial Documents
Bank Accounts
Investments
Credit Card Statements
Loans
Recent Pay Stubs
2 Yrs. Tax Returns

Credit Rating
A higher credit score may mean a lower interest rate on your mortgage. Below is contact information for credit reporting agencies. Your lender can give you advice on how to raise your credit score if needed. 

Equifax – www.equifax.com
Experian – www.experian.com
Trans Union – www.transunion.com

No Major Changes
Try to keep your payments down. Put closing costs and additional costs such as inspections at the top of your priorities. But also try to keep in mind paying off any credit card debt. Now is not a good time to make career changes or make large financial purchases. Lenders like stability. 

Shop Around -
Your mortgage is something that you may have to live with for 30 years, so spend time comparing and choosing a lender. There are several things to consider when choosing a lender. When searching for a lender, consider their prices, if they have loans that meet your needs and if you can work well with them. 

Loan Types

Fixed Rate:
The most frequently used plan, the fixed rate mortgage requires that you pay a constant amount, usually monthly. This type of mortgage first credits each payment to the interest due and then applies the balance to reduce the remaining principal. Over time as the repayment of the principal grows the interest declines.

Adjustable Rate Mortgage:
With an Adjustable Rate Mortgage (ARM) you start paying one interest rate that will usually fluctuate up or down over time. Because the interest may change so may your mortgage payments. 

Generally, interest rate adjustments are limited to one per period, and a set maximum amount of increases may be made over the life of the loan. The borrower is usually given the right to repay the loan in full without penalty whenever the interest rate changes. 

VA Loan:
This type of government loan is available to veterans who have served in the U.S. Armed Services and, in certain cases, to spouses of deceased veterans. The requirements vary depending on the year of service and whether the discharge was honorable or dishonorable. The main benefit to a VA loan is the borrower does not need a down payment. The loan is guaranteed by the Veterans Administration, but funded by a conventional lender. 

Pre Approved

Pre – Qualification
The lender will make an assessment based on information such as employment, income, assets, monthly debt and credit. The lender will make a decision to pre-qualify you for a certain loan amount. This is however just an opinion and the lender is not committed to any amount.

Pre – Approval
Pre-Approval is very similar to pre-qualification in that the lender will give you your buying capacity based on income. However, pre-approval is a longer and more in depth process but will give you a more clear and definitive guarantee on how much money you’re entitled to borrow.

Funding

Signing
This is the easiest part of the entire process. Your lender has agreed to fund your loan and now signing can start. But before you sign make sure to verify and finalize all documents. Your loan documents are usually signed in the presence of a notary or an escrow officer.

Transferring Funds
Your payment will either be automatically deducted or wired. Make sure that all important numbers are corrected for accuracy of both parties.