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Our Loan Process
We understand the loan process can be daunting, so PA Capital Mortgage has designed a loan process to make it simple for you. Let’s break it down into 5 phases for you. Click the following topics to expand and contract the sections…
Conversation / Application
Everything starts with a conversation, right! Chat with us so we can narrow it down to exactly what it is that you want and need. We have access to tons of Lenders, and they all have things that they do well (or not so well). After a brief conversation, we’ll make sure to select just the right Lender for your situation. For example, if you have a 740+ credit score, 20% down payment… we have a handful of Lenders that have incredible rates for that scenario. But if you have a 580 credit score, very little to put payment, and maybe even a bankruptcy 2+ years ago… we have a handful of Lenders for that too!
Underwriting
We’ll underwrite your loan file right now, even BEFORE you even find a house! Yeah, you heard that correctly: We will fully underwrite your loan file before you find a house… so all of the guesswork and uncertainties are behind you! We simply complete the underwriting process just as normal, but we leave out the property address for the home that you’re buying. We’ll plug-in an estimate home price, down payment, etc, and underwrite based on those estimates. (and of course we’ll estimate high for the sales price and monthly payment… so once you do find a house, your actual/final figures will decrease instead of increase, so we won’t run the risk of the approval being void)
Approval
Being that your loan is actually finished being Undewritten and you’re fully Approved, we will give you a Mortgage Approval (aka Mortgage Commitment), NOT just the typical “pre-approval” that all the other buyers will have! This means when you submit an offer on a house, the seller will be informed that YOU are basically done, which should make them feel more comfortable to accept YOUR offer compared to the others! And, you could even submit your offer with a 15-day Close!! Again, making your offer so much stronger than the other offers on the table!
Sales Agreement / Appraisal
The day that you secure a finalized Sales Agreement on a house, we’ll order the appraisal and title. Title sometimes takes a week or more, and that’s basically the reason why we suggest submitting your offer with a 15-day close or more. You always want to leave enough time to handle any issues with inspections, appraisals, and for the borough to provide the occupancy permit, lien letters, dye test results, etc. But these are all things WE handle for you… remember, YOU’RE ALREADY DONE!
Clear To Close!
That’s it! Bing, Bang, Boom… Done! We consistantly close loans in 15 days or less! Our process is so streamlined, we OFTEN close loans without even physically speaking with the customer ONE time! Millennials tend to appreciate our tech savvy way of processing a mortgage… we have closed many many loans with just a few emails back and forth! It never gets old, going to the closing table and “meeting” our customer for the very first time!
Down Payment Options
There are many different types of loan programs, all with different down payment requirements. Here are a few examples below:
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VA and USDA 0% Down
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Conventional 1% Down
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Conventional 3% Down
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FHA 3.5% Down
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Down to 550 score!
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Investment home
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Refinance loan
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FHA cash out refi
A couple quick points:
Typically, Conventional loans require at least 3% down, but we have a very unique Conventional loan program that requires only 1% down! Message us for details.
Conventional loans have a monthly PMI payment if you put less than 20% down. This monthly PMI payment will vary based on credit score and down payment size. It’s possible that it could be much higher than the FHA’s monthly PMI payment.
Seller’s Assist is limited to 3% of the sales price if your down payment is less than 10% (so on a $100,000 home, the seller can give you up to $3,000 to put towards your closing costs). If your down payment is 10% or more, then the seller can give you up to 6% Seller’s Assist.
The FHA loan requires 3.5% down payment, and we can do that all the way down to a 580 credit score! We can go as low as a 550 actually, but anything under 580 requires 10% down payment.
The FHA loan is a government loan program that is insured, so you have to pay a “premium” just like any other insurance policy. There is a 1-time fee of 1.75%, but that isn’t due “in cash at closing”, it is just added to the top of your loan balance (so it affects your payment a little bit). There is also a monthly PMI payment, but it doesn’t vary based on credit score, so often times the FHA monthly PMI payment is actually LESS than the Conventional loan’s PMI payment.
The seller can give you a Seller’s Assist of up to 6% of the sales price, so on a $100,000 home, the seller can give you up to $6,000 to put towards your closing costs. Typically, that is enough to cover all of your closing costs, so you would only need to spend your 3.5% required down payment in order to close!
The USDA loan doesn’t require a down payment! The true 100% purchase loan! It is available to homebuyers who are purchasing a home that is located in a USDA approved area. You can check any property address on the USDA website, to see if it’s located in an approved area. That link is https://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do?pageAction=sfp .
The USDA is a government insured loan, so it has a “premium” that you have to pay. They have a 1-time fee of 1%, but that isn’t “due in cash at closing”, it is just added to the top of your loan balance (so it affects your payment a little bit). It also has a monthly PMI payment, but it is typically smaller than the FHA’s or Conventional’s monthly PMI payment.
The USDA loan allows the seller to give a 6% Seller’s Assist to put towards the buyer’s closing costs, which typically will cover all closing costs, so the buyer can pay $0 down payment and $0 closing costs! (the appraisal and inspections would be your only costs)
There is a maximum income limit to qualify for the USDA loan, so it’s possible that you can make too much to qualify for this loan. You can check this on their site https://eligibility.sc.egov.usda.gov/eligibility/incomeEligibilityAction.do
Veterans have the benefit of buying a home with NO down payment, and NO monthly PMI payment! But the VA loan is a government insured loan program, so it does have a “premium” that needs to be paid. Their 1-time fee can vary based on service type, use type, and disability status. It can range from 1.5% to 3.3%, but it is completely waived for fully disabled veterans. The fee is not “due in cash at closing”, it is just added to the top of your loan balance (so it affects your payment a little bit).
The VA loan allows the seller to give a 6% Seller’s Assist to put towards the buyer’s closing costs, which typically will cover all closing costs, so the buyer can pay $0 down payment and $0 closing costs! (the appraisal and inspections would be your only costs)
-> NO CREDIT SCORE: We are able to do a loan for someone that has NO credit scores showing up on their credit report! For underwriting purposes we assume a 580 credit score and underwrite based on the guidelines that apply to a person with a 580 credit score.
-> Bankruptcies: We can do a loan for a person who is currently IN a Chapter 13 bankruptcy! Conditions apply, check with us for details. Or, after 2 years have elapsed since the discharge/dismissal date, you are eligible for an FHA loan!
-> Jumbo loan: 20% down is required for a Jumbo loan, which is a loan amount over $424,100 (in most counties) for a Single Family Home. In counties that have higher home prices, the loan amount is elevated to $636,150 or above. You can search by property address here https://onlinegeocoder.fanniemae.com/loanlimitgeocoder/pages/Online.aspx .
-> Investment or Second home: A 15% down payment is required for an investment home, and a 10% down payment is required for a Second home.
Buying a home is a big decision
Let one of our specialists assist you with making one of the largest and most important financial desicions of your life!
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