Todd Adams Financial

The Loan Process

Trust Todd Adams with Adams Financial to guide you through the Loan Process!

Get Your PreQualification Amount

How much money can you borrow? How much home can you afford?

If you are looking to buy a new home, you should start by determining what you can actually afford. The process is quick and easy, and by answering just a few questions, Todd can calculate your home-buying power.

When you know how much money a lender is likely to provide, you can limit your search to properties within a reasonable price range.

Call Todd at 760.941.2017 or CONTACT US today to get your loan underway!

Verify Your Credit Rating

How strong is your ability to repay debts? Do you make payments on or before their due dates?

Credit Scores are used by almost all lenders as they try to evaluate your credit risk. Your Credit Score is a number based on your credit history and mathematical formulas developed by Fair Isaac and Company, also known as FICO®.

Credit Scores help lenders make their financial decisions, determine credit offers and set interest rates by comparing your credit risk against that of the general population. It takes into account your entire credit history, including both "on time" and "past due" payments, new credit applications you may have made, the amount and type of credit you have already established, and more. Any lapses or delays in payment are taken into consideration and must be explained.

It helps to know that whenever you apply for a new credit card or loan, the lender will run your credit report; each new inquiry will have negative effects on your credit score. So avoid applying for new lines of credit when you are ready to look for your new home!

Review Credit by the Numbers FAQ

Your Credit Score is only one of several numbers which are used to determine your loan amount. Other values include:

  • Loan-To-Value Ratio
    Your Loan-To-Value Ratio, or LTV, is a percentage of the fair market value of your house; it represents the maximum amount of money that a lender is willing to provide when you purchase the property. If you have a high credit rating, lenders will be prepared to lend you a higher percentage of the value; your LTV may be 80-90%, even up to 100% if you have an excellent credit rating.
     
  • Debt Ratio
    Your Debt-to-Income Ratio, or Debt Ratio, is the ratio of your monthly payments (credit cards, auto and personal loans, alimony paid, etc) to your income (salary, interest, alimony received, etc). If your Debt Ratio is low, more of your income is available on a monthly basis; when lenders see this, they know you can afford to make higher mortgage payments.
Here is how this affects your loan. Lenders weigh your income, expenses and credit score to come up with a ballpark number. They also typically cap mortgage payments at about 1/3 of your gross monthly income.
  • If your Debt Ratio is low, you can afford to make larger mortgage payments, so you may be approved for a larger loan (with a higher LTV) than the "typical" borrower.
  • But if your Debt Ratio is high, you cannot afford to make the "typical" monthly payment, and your loan amount (and LTV) may be reduced; if this happens, you may need to make a larger downpayment to buy your new home.

Find Your Dream Home

Now that you have a good idea of what you can afford, it's time to meet with your real estate professional.
Go find your Dream Home!

Select the Right Loan Program

With more than 20 years of experience with a wide variety of loan programs, Todd Adams can help you select the loan program that matches both your present circumstances and your future goals. Whether you want a first-time home loan, a home equity line of credit or an "underwater" refinance, trust Todd Adams with Adams Financial to help guide you to the right loan program for your situation!

There are many loan programs to choose from for your new or used, home or commercial, purchase or refinance. Deciding which loan makes the most sense for you means understanding the benefits of each. Whether you are building or buying a new or used home, investing in a rental property, or refinancing your existing property, two basic options are available:

Fixed Rate Mortgage

Fixed rate mortgages have monthly payments that remain consistent throughout their entire term, which is usually 15 or 30 years in duration. The interest rate and loan payments stay the same; only your taxes and insurance may increase.

This is an ideal type of loan if you

  • prefer the stability of fixed monthly payments
  • want to avoid the risk of future payment increases
  • expect your income and spending to stay roughly the same
  • expect to live in the same home for more than 7 years

Adjustable Rate Mortgage

Adjustable Rate Mortgages or ARMs may typically last for anywhere from 5 to 30 years. But unlike Fixed Rate mortgages, your interest rate will fluctuate with the national economy during that time period. This means your monthly payments can increase or decrease, usually depending on the U.S. Prime Rate.

This type of loan may work best if you

  • don't mind having your payments periodically change (increase or decrease)
  • are comfortable with the risk of possible increases in your monthly payments
  • expect your income to continue increasing at the same-or-greater rate as the national economy
  • expect to move out of your home within 5 years

Apply for Your Loan

Todd loves to take loan applications!

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Apply by Phone

Call Todd today, and he will expertly guide you through the process!

858.273.5001 or
760.941.2017

Apply by Email

MORTGAGE APPLICATION FORM

Open the Mortgage Application Form, fill it out online, email the completed form using the button at the top of the first page. Note: If your default email program has not been set up, please save your completed form and call Todd for his email address.

760.941.2017

Apply by FAX

MORTGAGE APPLICATION FORM

Download the Mortgage Application Form, fill it out on your computer, print out the completed form, and fax it to 858.554.0517 or 760.407.1329

Apply by Hand

MORTGAGE APPLICATION FORM

Download the Mortgage Application Form, print out the blank form, fill it out by hand, and mail it to:

Adams Financial
6333 Greenwich Drive #270
San Diego, CA 92122

Get Your AU Approval

Automated Underwriting, or AU Approval, is a computer program that can approve your loan in certain circumstances. If you receive W-2s each year and have simple finances (think 1040-EZ), then the AU program may be able to approve you quickly. If your finances are more complicated, a human underwriter may be required.

You may see other initials on your underwriting paperwork: Fannie Mae's version of Automated Underwriting is called Desktop Underwriter (DU), while Freddie Mac's is called Loan Prospector (LP).

Pre-Approval

Pre-approval takes Prequalification to the next level. Pre-approval requires verification of your income, credit, assets and liabilities.

Once your loan has been pre-approved, you can

  • limit your search to properties within a more specific price range,
  • negotiate with the seller from a stronger position (since they know your loan will be funded), and
  • close your loan more quickly (because much of the loan paperwork has already been completed).

Collect All Financial Data

This is the point at which you must collect all of your financial information, including income and expenses, to be submitted with your loan application. The following is a checklist of items you will need to provide with your final loan application — itemizing all your income and assets, any proceeds you may have from the sale of your former house, and all of your debts and obligations.

Your Income

Pay Stubs
Copies of your most recent pay stubs, covering the most recent 30-day period and including your year-to-date income
W-2
Copies of your W-2 forms for the past two years
Employer Contact Information
Names and addresses of all employers for the past two years; include a letter explaining any gaps in employment in the past two years
Work Visa or Green Card
Copies of the front and back of your work visa or green card, if applicable
Alimony or Child Support
Divorce decree or court order stating the amount, plus verification of deposit of funds for the past year
Social Security Income, Disability or VA Benefits
Provide award letter from agency or organization
Proof of Other Income
If you are self-employed or wish to have interest, dividends, commissions, bonuses or rental income considered in your loan application, you must also provide:
  • Completed tax returns for the past two years, including all attached schedules and statements
  • Statement of year-to-date Profit and Loss
  • Federal Partnership (1065) and/or Corporate Income Tax Returns (1120) including all schedules, statements and addenda for the past two years, if applicable
  • K-1's for all partnerships and S-Corporations for the past two years
  • If you filed an extension, please supply a copy of the extension

Your Assets

Deposit
Verification of the deposit that you placed on your new home
Bank Statements
Your three most recent monthly statements showing savings, checking, money market funds, and any other funds you wish to disclose
Stocks and Bonds
Brokerage statements or copies of certificates for all stocks and bonds you own
Gifts
Gift Affidavit and verification of receipt of funds, if part of your cash was received in the form of a gift

You may also be asked to provide additional documentation. Please remember: the faster you provide the information, the smoother the loan application process.

Sale of Your House

If you are selling your existing home, you must provide several additional documents with your loan application:

Sales Contract
Copy of the signed sales contract, including all riders
Listing Sheet and Legal Description
Copy of the Listing Sheet with Legal Description of the Property, if available
Condo-Related Paperwork
Copies of the Condominium Declaration, by-laws and most recent budget paperwork, if available
Realtor Contact Information
Names, addresses and telephone numbers of the buyers' and sellers' agents
Attorney Contact Information
Names, addresses and telephone numbers of the real estate lawyers representing both yourself and your buyer(s)
Insurance Agents, Builders, others' Contact Information
Names, addresses and telephone numbers of other persons direcly involved in the sale of your house

The above documents are typically required when your new home purchase; but every situation is unique and you may be required to provide additional documentation. Please remember: the faster you provide the information, the smoother the loan application process.

Your Obligations

Monthly Debts
Statements covering the past three months, and including all names, addresses, account numbers, balances and monthly payment amounts for all existing debts
Housing
Statements covering the past two years of rent or mortgage payments, and including the name, address, account number, balance and monthly payments for each lienholder or landlord
Alimony or Child Support
Divorce decree or court order stating the amount and terms of the obligation
Application Fees
Include a check to cover Application Fees

Order an Appraisal

Is there sufficient value in the property to support the loan you have requested?

Your property appraisal is as important to your loan approval as your own financial information. The property must be appraised to determine its current market value; its location and comparable sales are considered during the evaluation.

Review Any Loan Conditions

Before your loan can be approved, it will go through an extensive underwriting process. The underwriter evaluates your application to determine the size and rate of your particular loan. During this process, they may find something in your application that requires more information for them to make a decision; this causes them to issue a Loan Condition requesting some type of additional information in order to process the loan application.

You can speed up your loan process by responding quickly and thoroughly to each loan condition as it arises.

Open Your Escrow Account

Your escrow account is used to hold your deposit, down payment, taxes, insurance and other funds related to your real estate transaction. It protects the lender’s financial interest in your property, and ensures that all of your money is distributed to the appropriate parties when required.

As the borrower, you may be paying bills that cover your mortgage, taxes and insurance on a monthly basis. However, taxes and insurance are usually billed only once or twice a year. Your escrow account accumulates your payments, and distributes them to your tax collector and insurance company as they become due.

Start the Title Paperwork

The most important piece of paper you will receive in this entire process is the deed. The deed is a document that conveys the property's title from the seller to you; it is effectively your "proof of ownership."

The phrase "clear title" is used to describe a title that is free of liens and legal questions as to the ownership of the property. Clear title is a requirement for all real estate transactions.

Married couples in California can hold title to real estate in several ways, including Joint Tenancy, in Trust, Community Property, or Community Property with Rights of Survivorship. You should consult an attorney as you choose a method, since there are complex legal and tax implications connected with each one. For example,
  • If a property is held in Joint Tenancy, the property automatically reverts to the surviving spouse upon death.
  • With Community Property, as the law currently stands, the surviving spouse would only be responsible for taxable gains from the date of death; this can have significant tax advantages.
  • In California, Rights of Survivorship may be added to Community Property, so that the property automatically reverts to the surviving spouse, removing the need for probate at the time of death.
An attorney can assist you in making this complex and important decision.

Submit Loan Application and Data for Final Approval

Once your loan application has been received, your lender will start the loan approval process immediately. Your loan processor will verify all of the information you have given. If any discrepancies are found, either the processor or your loan officer will troubleshoot to straighten them out.

All of the data you provided will be taken into account during this process. Lenders will scrutinize your financial status, including income, employment, credit and bank reports, credit rating, and all other stated assets and expenses. The property appraisal will be verified against your ability to pay, to ensure the proper loan amount.

In order to improve your chances of getting a loan approval:
  • Ensure that your loan application has been completely filled out; Todd will review the paperwork with you.
  • Respond promptly to any requests for additional documentation, especially if you have locked an interest rate or if your loan must close by a particular date.
  • Avoid moving money into or out from your bank accounts — especially without a paper trail.
  • Avoid making any major purchases until your loan is closed. Purchases can increase your debt load or deplete your assets, with adverse affects on your loan application.
  • Do not travel close to your loan's closing date. If you expect to be out of town, sign a Power of Attorney to authorize another individual to sign on your behalf at closing.

Schedule Delivery of All Loan Documents

Verify Receipt of Signed Documents

After your loan is approved, you are ready to sign the final loan documents. Carefully review all the documents before you sign! Make sure that the interest rate and loan terms are what you were promised. Also, verify the name and address on the loan documents.

The signatures must be made with the witness of a notary public, and are typically made at closing.

Receive Loan Funding

Your loan will normally close shortly after you have signed the final loan documents. If you are refinancing, federal law requires that you have three days to review the documents before your loan transaction can close.

Close on Your New Home!

There are several fees associated with obtaining a mortgage and transferring property ownership, which you will be expected to pay at closing. Bring a cashiers check for the down payment and closing costs along with you, since personal checks are not generally accepted.

You also will need to show your homeowner's insurance policy, and any other requirements (such as flood insurance) with proof of payment.

Record Deeds

Once the appropriate paperwork has been filed with the registrar's office in your local city, township or other municipality, the property is officially yours! Enjoy your new home!

Todd Adams Financial proudly services all of California and has done so for over 20 years.

SERVICES OFFERED:
Home Mortgage
Reverse Mortgage
Commercial Mortgage
Prequalification
First Time Buyer
Home Equity Loan
Home Loan Broker
Mortgage Rate Comparison
Mortgage Payments
First Mortgage
Refinancing
Adjustable Rate Mortgage
Loan Prequalification
Mortgage Information
Residential Mortgage
Mortgage Products
Online Mortgage Application
AREAS COVERED:
San Diego County
Vista, San Marcos, Escondido
Oceanside, Carlsbad, Leucadia
Encinitas, Solana Beach
Del Mar, La Jolla
Rancho Santa Fe
Coastal & Inland California
Poway & Rancho Bernardo
Coronado
Loma Portal & Point Loma
National City & Imperial Beach
Fallbrook, Bonsall, Ramona
San Clemente, Dana Point, Capistrano
Temecula Valley & Rancho California
Orange County
San Francisco Bay Area
San Joaquin Valley & the Sierras
Northern California
Southern California

Copyright © 2012 Adams Financial • Todd Adams, President • All rights reserved
Adams Financial  •  5060 Shoreham Place Suite 320  •  San Diego, CA 92122

760.941.2017 • 858.273.5001 •  619.688.8326

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