How the Loan Process Works

How the Loan Process Works2018-09-20T20:43:00+00:00

Understanding the Players

I take care to educate home buyers about how the loan process works, so they can make good decisions. Two things you need to know first:

Two Basic Tenets of the Mortgage Underwriting Process

  • Mortgage lending makes zero common sense.
    We have to work with a series of arbitrary rules and guidelines that risk managers publish. The bank underwriter has to meet these guidelines in order to release the funds of the loan to the borrower (you).

  • The bank underwriter’s job is to kill the loan.
    They are not in the business of making loans — they are in the business of killing loans. In other words, their job is to find a reason not to release funds to the borrower (you).

Vic working with home buyer client

My Role in the Loan Process

Vic working with home buyer client

As an independent wholesale mortgage broker, my job is to understand these arbitrary guidelines as well as the bank’s underwriter does. This enables me to structure your application in such a way that the underwriter doesn’t have to do too much thinking to say YES. More about Vic »

Over 100 Lending Partners

My company C2 Financial has 100 lending partners. These are mortgage banks we have agreements with, to do business. We are a wholesale mortgage channel, meaning our banking partners are only offering loans through brokers like us. In contrast RETAIL banks are large institutions with branches and an online presence for consumers, and focusing on their individual mortgage products.


2018 Top Mortgage Broker
in the Country
2018 50 Best Companies to Work For

At C2 Financial, we work with wholesale mortgage bankers in order to match up lenders and borrowers. We put the borrower in contact with the best lending solution for them. Then we coordinate all of the various third parties that are involved in a loan transaction: title company, escrow company, appraiser, and credit reporting agency.

With over 100 lenders in our contact sphere, we can compare the way different lenders underwrite loans, in relation to your particular financial profile. We can also shop each lender against the other, to obtain the best rate option for our borrowers.

How the Loan Process Works

The more you understand about how the loan process works, the easier it will be for you to make good decisions.

There is no obligation when meeting with me. I am happy to meet with you to discuss your situation and answer any questions you may have about the mortgage lending process.

If you are ready to move forward, I will collect your data: basic personal information, name, date of birth, your two-year residence history, and your two-year job history.

There are three basic data points we use, to determine your options as a potential borrower:

  1. Credit
    We look at your credit score, the length and depth of your credit, your credit history, your present credit profile, and what types of monthly recurring liabilities you are paying, including other loans or mortgages.
  2. Income and Employment or Job History
    Are you an employee with a W2? Do you work full- or part-time? How long have you been working in this job? Are you self-employed? Do you have income from rental property?
  3. Banked Assets
    Non-retirement and retirement assets, 529, any money that is in any type of institutional financial account, including checking, savings, money market, mutual fund, stocks, bonds, securities, IRA. Note: loan underwriters do not include personal property, i.e.: cars, jewelry, et al., as assets. Lenders not only want to see that you can cover costs, but they also may want verification that you have emergency funds available in case of job loss.

During the free consultation part of our relationship, we gather the documentation needed to support the information collected in Step 1. This may include W2s, tax returns, pay stubs, and/or two-months of bank statements.

Seasoning

Assets have to be verified for two months. This is known in the industry as “seasoning.” So, if you have an influx of cash from an undocumented source, a.k.a. “mattress money,” it has to sit for a bit. Thus, two months of bank statements are required. Seasoning must take place PRIOR to submitting the loan packet for underwriting.

Still working for free here, I put together your loan application in a detailed and accurate way, in order to get your loan approved by the underwriter. Remember, this is the person who is paid to find reasons not to loan to you.

And this is why you don’t want to use one of those online services, like Rocket Mortgage. They are simply trying to hook you by collecting your raw data and from a shallow assessment, determine if you are a worthy customer of their single product or limited set of products. They don’t care about the nuances of your situation, nor in finding the right loan for you.

As someone who knows how the loan process works inside out, I understand how to analyze all the supporting documents. I will match you with the loan programs where their underwriting guidelines match with your data, your credit score, income, liquid assets, and desired loan amount. Then I create a complete packet for you and send it to the underwriters of loans that best suit your needs.

My services at this point are still free.

Your packet goes to a lender or lenders for a formal underwrite.

At this point, they my come back to us with any requests for additional documentation or data to clear the loan.

The majority of the time, the packets I send in at this point clear for funding right away. This is how we are able to close loans in 10-to-15 days — a crucial factor in high-intensity real estate markets like California and the San Francisco Bay Area.

Self-Employment Income Verification

At this stage, if you are self-employed, the underwriter may require:

  • a letter from a CPA or tax preparer
  • a copy of your business license
  • the appropriate tax forms:
    • a corporate tax return or K1 (if you have one in addition to your w2s and pay stubs for your income as an employee of your corporation
    • independent contractors will be asked to supply a copy of your Schedule C

We also have many loan options for self-employed borrowers who cannot meet the normal qualifying criteria using traditional means, such as tax returns, due to income write offs. We are approved with many lenders who will take various alternate forms of documentation such as bank statement deposits and even some stated income products.

I’m still on your team, working to get the loan funded on your behalf, for free.

At this stage, the lender releases the loan documents to escrow if that is needed, and the final closing begins. The lender reviews final documents one last time at this stage, and then if they are satisfied, they release the funds of the loan.

During this final review, the lender may call your place of work to verbally verify gainful employment; so don’t quit your job until after the loan is completed!

Roughly 90% of what I vet initially will close.

95% of what I submit for underwriting will close.

With 21 years in the mortgage industry and 25 years in lending overall, I work on your behalf, to get us here.

Now I get paid. For services rendered. The satisfaction of getting you your money — that’s my bonus. The lender we contract with to secure your loan sets the commission amount and pays us.

There is no obligation when meeting with me. I am happy to meet with you to discuss your situation and answer any questions you may have about the mortgage lending process.

If you are ready to move forward, I will collect your data: basic personal information, name, date of birth, your two-year residence history, and your two-year job history.

There are three basic data points we use, to determine your options as a potential borrower:

  1. Credit
    We look at your credit score, the length and depth of your credit, your credit history, your present credit profile, and what types of monthly recurring liabilities you are paying, including other loans or mortgages.
  2. Income and Employment or Job History
    Are you an employee with a W2? Do you work full- or part-time? How long have you been working in this job? Are you self-employed? Do you have income from rental property?
  3. Banked Assets
    Non-retirement and retirement assets, 529, any money that is in any type of institutional financial account, including checking, savings, money market, mutual fund, stocks, bonds, securities, IRA. Note: loan underwriters do not include personal property, i.e.: cars, jewelry, et al., as assets. Lenders not only want to see that you can cover costs, but they also may want verification that you have emergency funds available in case of job loss.

During the free consultation part of our relationship, we gather the documentation needed to support the information collected in Step 1. This may include W2s, tax returns, pay stubs, and/or two-months of bank statements.

Seasoning

Assets have to be verified for two months. This is known in the industry as “seasoning.” So, if you have an influx of cash from an undocumented source, a.k.a. “mattress money,” it has to sit for a bit. Thus, two months of bank statements are required. Seasoning must take place PRIOR to submitting the loan packet for underwriting.

Still working for free here, I put together your loan application in a detailed and accurate way, in order to get your loan approved by the underwriter. Remember, this is the person who is paid to find reasons not to loan to you.

And this is why you don’t want to use one of those online services, like Rocket Mortgage. They are simply trying to hook you by collecting your raw data and from a shallow assessment, determine if you are a worthy customer of their single product or limited set of products. They are not interested in the nuances of your situation, nor in finding the right loan for you.

As someone who knows how the loan process works inside out, I understand how to analyze all the supporting documents. I will match you with the loan programs where their underwriting guidelines match with your data, your credit score, income, liquid assets, and desired loan amount. Then I create a complete packet for you and send it to the underwriters of loans that best suit your needs.

My services at this point are still free.

Your packet goes to a lender or lenders for a formal underwrite.

At this point, they my come back to us with any requests for additional documentation or data to clear the loan.

The majority of the time, the packets I send in at this point clear for funding right away. This is how we are able to close loans in 10-to-15 days — a crucial factor in high-intensity real estate markets like California and the San Francisco Bay Area.

Self-Employment Income Verification

At this stage, if you are self-employed, the underwriter may require:

  • a letter from a CPA or tax preparer
  • a copy of your business license
  • the appropriate tax forms:
    • a corporate tax return or K1 (if you have one in addition to your w2s and pay stubs for your income as an employee of your corporation
    • independent contractors will be asked to supply a copy of your Schedule C

We also have many loan options for self-employed borrowers who cannot meet the normal qualifying criteria using traditional means, such as tax returns, due to income write offs. We are approved with many lenders who will take various alternate forms of documentation such as bank statement deposits and even some stated income products.

I’m still on your team, working to get the loan funded on your behalf, for free.

At this stage, the lender releases the loan documents to escrow if that is needed, and the final closing begins. The lender reviews final documents one last time at this stage, and then if they are satisfied, they release the funds of the loan.

During this final review, the lender may call your place of work to verbally verify gainful employment; so don’t quit your job until after the loan is completed!

Roughly 90% of what I vet initially will close.

95% of what I submit for underwriting will close.

With 21 years in the mortgage industry and 25 years in lending overall, I work on your behalf, to get us here.

Now I get paid. For services rendered. The satisfaction of getting you your money — that’s my bonus. The lender we contract with to secure your loan sets the commission amount and pays us.