We know how overwhelming purchasing a home can be. That's why we've provided resources to guide you through the process. Take a look at the information below for answers to common homebuying questions and checklists to help you stay on track.
As community lenders, we're located right in your neighborhood and are ready to help with any need you may have. Please don't hesitate to reach out to us if you have questions about the homebuying process.
Buyer Application Checklist
The following is information you may need to provide when you apply for your mortgage.
- Full legal name, Social Security number, date of birth, primary phone number, email address, home and mailing addresses for past two years
- Gross income amount, including any part-time jobs, overtime, bonuses and commissions
- Secondary income sources and amounts to be considered for the loan such as retirement benefits, veterans’ benefits, disability payments, alimony, child support and rental or investment income
- Name, address and phone numbers of all employers for past two years
- Balance of each bank account, retirement, investment and other asset accounts
- Current expenses: housing, credit card and loan payments, child support and other obligations
- Address of property being purchased, year built, estimated down payment amount and purchase price
- Estimates of property taxes, hazard insurance and any homeowner association dues on property
Your mortgage consultant may ask for some or all of these documents. Be prepared to provide additional information as the application process moves forward.
- IRS Form 4506T – request for tax transcript
- Pay stubs for the last 30 days with current year-to-date information for all applicants
- IRS Form W-2 for the last two years
- Federal Tax Returns (IRS Form 1040) for the last two years
- Written explanation if employed less than two years or employment gap exists within the last two years
- Asset/bank statements for the last two months for all accounts listed on application
- Credit explanation letter for late payments, collections, judgments or other negative items in credit history
- Source of funds for any large deposits on asset statements (outside of payroll or gift fund deposits)
- Judicial decree or court order for each obligation due to legal action (lawsuit, judgement, child support)
- Bankruptcy/discharge papers for any bankruptcies existing in credit history
- Payment history for public utilities, phone company, cable, car insurance and other expenses
- Federal Tax Returns (personal and business) for the last three years
- Profit and loss statement, year to date
- List of all business debt
- Driver’s license and Social Security card
- Homeowners insurance information, including agent’s name and phone number
- Purchase contract signed by all parties
The Mortgage Process
At NOLA Lending Group we make the home financing process easy. Here’s a short description of how we’ll move through the mortgage process together.
Did you know you can get pre-qualified for a loan even before you start looking for your new home? A NOLA Lending Group home mortgage specialist can pre-qualify you so you’ll have a good idea of how much home you can afford. Once you’ve found that perfect property and a seller has accepted your offer, you’ll be ready to move to the application process.
Once you’ve chosen a home, your NOLA Lending Group home mortgage specialist will gather information about the property you want to buy and collect information about you, too. We’ll need to know things like income, assets and employment history. For a complete list of information you’ll need, see our Application Checklist above.
When your application is complete a NOLA Lending Group loan processor carefully reviews your file to ensure accuracy. At this step we order a credit report to determine your credit history and credit score. We will also order an appraisal of the property.
An underwriter reviews your complete file and determines whether your loan will be granted. The underwriter issues the loan approval. There may be requests for additional information during this review process.
The closing process begins once the loan is approved. The NOLA Lending Group closing department carefully prepares all your closing documents and sends instructions to the title agent. The title agent examines the title of the property and works with you to select a closing date. At closing you will sign papers, pay closing costs and finalize the transaction. Now you’re ready to move into your new home.
Investment Property Loans
What are the Benefits of Buying an Investment Property?
Rental properties can create cash flow and ongoing income. Some rental properties may provide tax breaks along with rental income.
Getting Started with Investment Homebuying
The ultimate goal of investment homebuying is to make money. You should have an overall investment strategy and a thorough knowledge of where the property is located.
Create a Financial Plan
Know your credit needs and borrowing ability. Check your credit history. Review your income, expenses and available cash for down payment.
Estimate What You Can Spend
Calculate your monthly payment and cash needed for down payment, closing costs and prepaid expenses.
Should I buy or rent?
Buying a home is an investment. When you rent, your rental payment buys shelter for one month and nothing more. When you own your home you can deduct the cost of your mortgage loan interest from your income taxes. This is a significant savings because the interest your pay is a large portion of your monthly mortgage payment. Property taxes are also deductible. As a homeowner you also have some additional expenses such as taxes, insurance, and maintenance. Your home may also increase in value over the years.
What is the first step in the homebuying process?
Meet with a lender first. Before obtaining a home loan mortgage, it’s in your best interest to understand the different options available so that you can make the best decision for you and your family. Our loan specialists will pre-qualify you based on your credit, income and monthly obligations. They will show you what the guidelines will allow, keeping in mind what your comfort zone is for a monthly mortgage payment.
What documentation will be required at the time of loan application?
Supporting documentation will consist of your two most recent pay stubs, tax returns for the past two years, Social Security number of all borrowers and a copy of your driver’s license. Additional information such as a Social Security award letter may be required depending on how you are compensated.
What documentation will be required after you receive your loan estimate?
Other supporting documentation including your W-2 and/or 1099 forms for the past two years and two months of bank statements. If you want to expedite the loan process you can supply this information at the time of loan application as well.
How much money will I need to buy a home?
In general, you need money to cover three major costs: earnest money, which is the deposit you make on the home when you submit an offer to the sellers to prove that you are serious about wanting to buy the house; the down payment, a percentage of the loan which you must pay when you go to settlement; and closing costs, the costs associated with processing the paperwork to buy the house.
How much money will I need for a down payment?
You can purchase a home with as little as 3.5% down payment, which can be a gift from a relative. There are still a few loan programs which will allow no down payment with certain restrictions such as income, loan amounts and location. In addition to down-payment costs, you can expect costs associated with closing the loan which can be paid at the closing. The seller can pay closing costs if agreed upon in the purchase agreement with some restrictions. Your real estate agent and loan officer can assist you with this.
How much money will I need at closing?
To close your loan, you’ll need funds for your down payment, closing costs and prepaid amounts for property taxes and insurance escrow accounts. NOLA Lending Group will provide you with a Loan Estimate (LE) of settlement costs when your loan is accepted.
How are your rates lower than the rate quoted by my bank?
Due to the volume and quality of loans closed by NOLA Lending Group, investors compete for our business. The bank’s rates are usually marked up to help them offset their huge fixed costs of running the bank. We receive rate quotes from over 25 companies each day so we get to shop for the lowest rate available to make sure you’re getting the absolute best rate.
Why choose NOLA Lending Group?
Financing your home is about more than finding an attractive rate — even though NOLA Lending offers competitive rates. We provide in house processing and underwriting, which means your loan is always in our hands through your loan closing. We do not service loans. We may assign, sell or transfer the servicing of your mortgage loan. We recognize that home ownership is the ultimate American dream and one of the largest financial transactions individuals can make. Every loan is as important to us as it is to the borrower. We are committed to providing our clients with the absolute best home-buying experience possible. We want to be your lender for life.
What is the difference between a fixed-rate and an adjustable-rate mortgage?
A fixed-rate mortgage has an interest rate that stays the same throughout the life of the loan. With a fixed-rate mortgage you have the security of always knowing exactly what the principal and interest portion of your monthly loan payment will be. The interest on adjustable-rate mortgages can fluctuate (up or down), which could raise, or lower, the interest portion of your payment. This offers you an opportunity to potentially save on interest costs. The safest adjustable-rate mortgages have annual lifetime rate caps, which limits how high your interest rate may go.
What is a rate lock?
A rate lock protects you from financial market fluctuations. You can choose to lock or not lock your rate. If you lock your interest rate and there are no changes to your loan, your interest rate generally remains the same. If there are changes to your loan, your final interest rate may change.
How do I know when to lock my rate or let it float?
No one can make this decision for you. If you are comfortable with the monthly payment and the other terms of the loan, it makes sense to formalize it in writing. If rates fall after you lock, try to remember that your goal was to secure an affordable loan to purchase the property and you’ve done that.
When can I lock my rate?
You can lock your rate at application, while your loan is being processed and approved, or any time just prior to closing.
What is private mortgage insurance (PMI)?
PMI is required for conventional loans with a down payment of less than 20 percent of the value of the home. You can avoid paying PMI by making a down payment of 20 percent or more.
When can I cancel PMI?
PMI will automatically end when the loan-to-value ratio reaches 78 percent and your loan payments are up to date. Borrowers can request cancellation of PMI when the loan reaches an 80 percent loan-to-value ratio, assuming the loan is current.
Do I need homeowners insurance at closing?
Proof of homeowners insurance will be required for closing. You will need to present an insurance binder and pay for one year of coverage.
What is the difference between private mortgage insurance and homeowners insurance?
Homeowners insurance covers damages to your home, your belongings and accidents as outlined in the policy.
Mortgage insurance protects the mortgage lender if a customer is unable to make payments and defaults on the loan. If you make a down payment of 20% or greater, private mortgage insurance is not required.
What is Annual Percentage Rate (APR) and how is it figured?
APR is a calculated interest rate that reflects the overall cost of a loan on a yearly basis. APR includes interest payments, origination fees, discount points and other costs of getting a loan and is usually higher than the interest rate.
What is the difference between the rate and the APR?
There are many costs associated with taking out a mortgage. These include the interest rate, points, fees, and other charges. The interest rate is the cost of borrowing money expressed as a percentage rate. It does not reflect fees or any other charges you may have to pay for the loan. An Annual Percentage Rate (APR) is a broader measure of cost to you of borrowing money. The APR reflects not only the interest rate but also the points, broker fees, and certain other charges that you have to pay to get the loan, including certain of your closing costs. For that reason, your APR is usually higher than your interest rate.
What are points?
Another name for points is discount. These are funds paid at closing to lower your interest rate for the life of the loan. It is a way to “buy down” your interest rate.
What are “pre-paids”?
Pre-paids include hazard/homeowners insurance, taxes and pre-paid interest. Generally, you will be required to pay for the first year of your hazard/homeowners and flood (if needed) insurance in advance. Also your lender will require you to deposit up to two months of payments to establish your escrow account.
Can I pay my own taxes and insurance?
It varies by loan program. Your mortgage specialist can determine if this option is available to you.
Does NOLA Lending Group require a property inspection?
We do not require a homes inspection, but one may be required based on the loan program you participate. However, if you are buying a home it is a very good idea to have a property inspection and make your purchase offer contingent on the report of the inspector. Do not confuse the appraisal and an inspection. An appraisal is required by most lenders to confirm the value of the real estate and the terms of the mortgage agreement.