Once the loan is approved, the file is transferred to AHF’s closing and funding department. You will be notified of the approval and a closing scheduled. At the closing, you should:

• Bring a cashier’s check for your down payment and closing costs if required. Personal checks are  normally not accepted and if they are they will delay the closing until the check clears your bank.
• Bring identification and proof of insurance.
• Review the final loan documents. Make sure that the interest rate and loan terms are what you agreed upon. Also, verify that the names and address on the loan documents are accurate.
• Sign the loan documents.

After the documents are signed, they are returned to our processing department, which examines them and, if everything is in order, arranges for the funding of the loan. Once the loan has funded, the mortgage note and deed of trust are recorded at the county recorder’s office. The closer then prints the final settlement costs on the HUD-1 Settlement Form and final disbursements are made.

The right mortgage program is going to depend on your personal situation. This is where a mortgage banker’s experience really counts. With so many different loan programs to choose among, each with different interest rates, maximum loan amounts, origination costs, terms, and more, it can be difficult to know which makes the best sense for your situation. An experienced AHF mortgage professional will evaluate your situation and provide a comparison of the most suitable mortgage programs, allowing you to make an informed decision.

Pre-Qualification Provides You with a Base Line

Pre-qualification is not a guarantee of a loan, but rather a statement of opinion from American Home Funding that your initial financial and credit information have been reviewed and you appear to qualify for specified loan amount. The advantage of pre-qualification is that it gives you a good idea of how much financing you might qualify for under different loan programs and interest rates before you find the right home or decide you are ready to refinance. It can also help you avoid falling in love with a home, only to find out you can’t qualify to purchase it. At American Home Funding there is no cost to pre-qualify other than a credit report fee.

Prequalification looks at two key factors: Your ability to repay a loan, and your willingness to repay the loan. Ability is based on your current employment and income. Willingness is based on part on your reason for purchasing the home – as a residence, a investment, rental property or other – and your past credit or rental payment history. Ideally, we would like you to have been employed at the same place for at least two years and be in the same line of work for a while.

You will need to provide the following information: gross monthly income and total monthly payments (car payments, minimum monthly payments on credit cards, child support payments and all payments you have to make every month). Your debts will be compared to your income to arrive at a total debt-to-income ratio. For the best interest rate, your percentage should be under 36. The lower the number, the better.

Your credit report will include a FICO (Fair, Isaac and Co.) score, which is the credit scoring system most widely used by lenders. A FICO score of 680 or better is considered "A+" (excellent), and with good ratios and other positive factors should get you the best interest rates available.
How much mortgage you can afford is estimated through two essential ratios: housing ratio and debt ratio. Your housing ratio is determined by your total monthly mortgage payment divided by your total monthly income. Debt ratio is determined by the sum of your total monthly mortgage payment and other fixed monthly debt payments divided by your total monthly income.

A maximum housing ratio of 28% and a maximum debt ratio of 36% (28/36) used to be national guidelines. However, today, you can get by with much higher percentages, if you can show that you can make the payment.
Based on your prequalification, American Home Funding will find a loan program which is right for you, and get you prequalified for the most money, and the highest ratios.

At this point, we will order a Credit Report, Appraisal and Title Report and verify information on the application, such as bank deposits and payment histories. If you have had credit problems, be prepared to discuss them honestly with your loan officer, who will assist you in writing your 'Letter of Explanation.' The Appraisal and Title Report will be checked for property issues that may require further investigation. The entire mortgage package is then put together for submission to the lender.

This is where working with American Home Funding can really make a difference. Our processing staff is in house, enabling quick turnaround. Manual underwriting allows us to take special circumstances into consideration. By working with multiple funding providers and investors, we know their preferences and what loans they are most interested in acquiring.

There are different application and documentation requirements depending upon the mortgage option you select. Once you’ve narrowed your choice of financial down to one or two options it’s time to complete the Application and provide required documentation (links to Required Documents page) of employment, income, assets and liabilities. Within three days of the submitting the application, you will be provided with the Good Faith Estimate (GFE) and a Truth-In-Lending Statement (TIL) which verify the various fees and closing cost estimates discussed earlier.