The Mortgage Process  |  Types of Mortgage Loans
 

THE MORTGAGE PROCESS

The overall mortgage process may seem complicated and overwhelming, but we break it down into simple steps that are easy for you to follow.

3. Finding the right home
Searching for your dream home is exciting! Before you visit with your lender, decide which features you want in your new home. Prioritizing what you want compared to what you need, will help you stay within your price range and also let you have what’s most important to you.

4. Before you apply
Before you apply, you’ll need to gather some important documents that will be used to verify your information. This will cause fewer delays and make the process go as quickly as possible. It is important to make sure the information you provide is accurate and current. Because there is a lot of information to gather, it helps to start collecting the paperwork ahead of time. Below is a list of the items that may be needed to complete your loan application.

Borrower’s Checklist

• Last two years’ Federal Tax Returns & W-2 forms

• Two most recent pay stubs covering once complete month

• Verification of any other source of ongoing income

• Last two months checking and/or savings bank statements

• Residence address(es) for the past two years

• Names and addresses of each employer for the past two years and dates of employment

• Asset statement listing (Banks accounts, bonds, mutual funds, stocks, Retirement funds, life insurance, property)

• Liability statement (Listing of creditors; include account numbers, monthly payment, and outstanding balance)

• Proof of assets to be used for down payment

• Copy of documents related to divorce, bankruptcy, collection, judgements, or pending lawsuits

• If Self-Employed, Year to date Profit and Loss Statement prepared by your accountant and/or Corporate/Partnership Tax Returns for the past two years

• Copy of original Purchase Agreement from sale of present home (if applicable)

• Name, address of landlord if renting

• Construction agreement as well as plans and specifications (New Construction only)

You may be asked for additional information, depending on your particular circumstances and type of loan.

5. Applying and working with Iowa State Bank.
Once you’ve decided on the home you want, it’s time to review what type of loan will work best for you and consider interest rates. Before you make an offer, you may want to think about property inspection, a homeowner’s warranty, and/or consulting a lawyer. Next is to negotiate your purchase commitment by making an offer and signing a purchase agreement. This legal contract lists the type of loan you’re applying for, purchase price, total down payment, interest rate, and your anticipated closing date.

Lastly, you will need to complete the mortgage loan application. Iowa State Bank’s loan officers go through each step of the application process with you to ensure everything is filled out completely and accurately. At this time you will receive the following disclosures: Truth in Lending Disclosure, Good Faith Estimate, a Servicing Disclosure and a Settlement Statement Booklet.

After we receive your completed application and a non-refundable application fee of $375, Iowa State Bank will review and confirm all the submitted information. At the same time the following steps will be taken:

• An appraisal will be requested to determine the value of the property.

• A credit bureau will be ordered to review your credit history.

• Iowa State Bank will verify the down payment and any other assets.

• Iowa State Bank will update the abstract and a title search will be conducted to uncover any problems with legal ownership of the subject property.

At this point, you may want to conduct a property inspection to carefully examine the house. Most buyers generally hire an inspector. They are expected to check the entire house from top to bottom. They will evaluate any problems that may change the value of the house, notice if there is anything that needs to be repaired, and give you a detailed report of their findings. Iowa State Bank requires a termite inspection. You will also need to provide proof of homeowner’s insurance.

6. Closing
Before closing, you will want to do a final walk-through inspection to make sure all repairs have been made and no items in your agreement have been changed or removed from the house. Prior to the closing, you will receive a settlement statement summarizing all costs related to your home purchase for both the buyer and seller. Make sure to review this information carefully.

Closing is the actual transfer of ownership from seller to buyer and the final step that officially makes the home yours. At this point, you will sign the promissory note, the mortgage, and any other related documents. Typically, down payment and closing costs are due at this time. The seller is paid for the agreed purchase price and the mortgage is activated.