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Having your financial documentation in order will help get the process off to a good start. Below are some of the documents you may need to provide to complete the loan application process:

For a Purchase Loan:

• Signed Purchase Agreement
• Last 2 years Tax Returns
• 2 years W-2 and current paystub
• 12 months cancelled checks for verification of rent/mortgage
• 2 months copies of personal bank statements
• Asset Statement (401K, Brokerage Accounts, Mutual Funds, Stocks, etc)
• Signed loan application
• Mortgage Statement or Coupons/rental agreements
• Borrower's signed authorization
• Driver's License and Social Security Card

For a Refinance Loan:

• Last 2 years Tax Returns
• 2 years W-2 and current paystub
• 2 months copies of personal bank statements
• Asset Statement (401K, Brokerage Accounts, Mutual Funds, Stocks, etc)
• Signed loan application
• Mortgage Statement or Coupons/rental agreements
• Borrower's signed authorization
• Driver's License and Social Security Card

Prequalification

Prequalification occurs before the loan process formally begins. The lender gathers financial information from the borrowers and makes a conditional determination about their qualifications for a loan. To start the prequalification process, click here.

Application

The application is the beginning of the formal loan process. The applicant completes a mortgage application with the Mortgage Professional and supplies all of the required information and documentation for processing. Various down payments and “closing costs” are discussed at this time and the borrower will receive a Good Faith Estimate (GFE) and a Truth-In-Lending statement (TIL) that itemize the rates, loan fees, and associated costs for obtaining the loan. To contact a Axcell Financial Mortgage Professional who can help you through the process, click here.

Processing

The lender reviews the documentation and provides a loan package for the loan underwriter.

Underwriting

An underwriter determines whether the information provided is acceptable to offer the applicant a loan. If more information is needed, the applicant is contacted to supply it.

Mortgage Insurance

For a conventional loan, mortgage insurance is required when the down payment is less than 20% of the loan amount. FHA and VA loans also require mortgage insurance or similar protections.

Pre-Closing

During this period, title insurance is ordered, all approval contingencies are satisfied, and a closing date is scheduled for the loan.

Closing

At the closing, the lender "funds" the loan with a cashier's check, draft or wire to the selling party in exchange for the title to the property. This is the point at which the borrower has completed the loan process and the transaction is "closed."

Adjustable-Rate Mortgage (ARM): a mortgage with a variable interest rate, where payments or rates may adjust monthly, bi-annually, annually, or on some other basis.

Amortization: Paying off a loan over time in installments, including the amount applied towards interest and the amount toward principal each month.

Annual Percentage Rate (APR): the interest rate you pay on your mortgage, including loan fees, points, and other costs associated with the loan.

Appraisal: a report completed by an appraiser that determines the value of a given property.

Cap: a maximum figure that limits the amount or frequency an interest rate or payment can change on an adjustable-rate mortgage loan.

Certificate of Reasonable Value (CRV): an appraisal issued by the Veterans Administration (VA) that determines the value of a property. The loan amount may not exceed the CRV on a VA loan.

Closing: the final step in the loan process when loan documents are signed and become effective.

Conforming Loan: a loan that meets Fannie Mae and Freddie Mac guidelines, and is below a maximum loan amount.

Credit Report: a report used by a bank or lender to review your credit profile and your ability to carry and repay debt.

Debt-to-Income Ratio: the ratio of monthly liabilities and housing expenses divided by the gross monthly income of the applicant or borrower.

Delinquency: the failure to make a monthly debt or other payment on time.

Down Payment: an upfront payment to the seller of a property for a portion of the sales price. The sales price (sometimes plus closing costs) minus the down payment typically equals the mortgage loan amount.

Earnest Money: a deposit paid to the seller by the buyer as a pledge to complete the real estate transaction. If the seller accepts the offer, the deposit is typically held in escrow and applied to the down payment when the transaction is completed.

Equal Credit Opportunity Act: a federal law that prevents lenders from discriminating against applicants based on race, religion, national origin, sex, age, marital status or participation in public assistance programs.

Equity: the value of a property less any existing liens.

Escrow Agent: a third party intermediary who holds and allocates funds, including taxes and insurance in a mortgage transaction. Often, a substitute term for a closing or settlement agent.

Federal Home Loan Mortgage Corporation: one of the largest purchasers of conventional mortgages on the secondary market. Also known as Freddie Mac.

Federal National Mortgage Corporation: a publicly owned, government-sponsored corporation that purchases conventional mortgages on the secondary market. Also known as Fannie Mae.

FHA Loan: a federal government program that allows applicants to qualify for mortgages by providing loan insurance to mortgage holders as long as they fit certain criteria set forth by the Federal Housing Administration.

Fixed Rate Mortgage: a mortgage with an interest rate that does not change over time.

Hazard Insurance: insurance protecting a property owner and lender from damages caused by fire, severe weather, or other events.

Home Equity Line of Credit (HELOC): a loan that allows a borrower to obtain revolving credit (similar to how a credit card works) using their home as collateral.

Impound Account: oftentimes called an escrow account, an account established by the lender to collect and automatically pay a borrower’s property taxes and insurance premiums when payments are due.

Jumbo Loan: a loan amount above "conforming" or maximum loan limits that is set each year by Fannie Mae and Freddie Mac.

Lien: a claim against a property by a lender or other creditor to secure repayment of a debt, often in the form of a mortgage.

Loan-to-Value Ratio: the percentage of the appraised property value that is borrowed from a lender. For example, a loan of $80,000 on the property that is appraised at $100,000 would have a loan-to-value ratio of 80%.

Margin: an amount specified by the lender which, when added to the accompanying mortgage index, sets the interest rate for an adjustable-rate mortgage.

Mortgage or Deed of Trust: a pledge of property or security instrument given by an applicant or borrower to a lender, recorded in public records as a lien on the subject real estate.

Mortgage Discount Points: amount paid by borrowers at closing to reduce the interest rate on a home loan.

Mortgage Professional: a professional trained to guide applicants through the mortgage loan process.

Mortgagee: the mortgage lender.

Mortgagor: the borrower or homeowner.

Note: a written promise to repay the loan amount plus interest upon the specified terms and provisions.

Origination Fee: a percentage of the loan amount charged by the lender or mortgage broker for completing the loan process and for having the lender grant the borrower a loan.

PITI: the monthly housing expense, expressed as principal, interest, taxes, and insurance.

Prepayment Fee: a fee charged by the lender if a loan including a prepayment fee provision is refinanced or repaid prior to a specified date as agreed upon in the loan documents.

Prequalification: the process of providing financial and other information (such as employment history) by a prospective borrower in order for the lender to determine the loan amount the borrower may qualify for to purchase a home.

Prime Rate: the lowest rate of interest on bank loans at a given time and place, offered to preferred borrowers. Also called prime interest rate.

Principal: the balance of the outstanding debt, not including interest.

Private Mortgage Insurance: required insurance on a mortgage if the down payment is less than a specified amount (typically 20% on a conventional loan).

Refinance: the act of replacing your existing loan(s) with a new loan on the same property.

Right of Rescission: a federal law which allows a homeowner to rescind or cancel a contract to refinance their primary residence within three days of signing loan documents.

Short Refinance: a cross between a short sale and a rate and term refinance, in which an old loan is replaced with a new one, but with a lower loan balance.

Short Sale: the sale of a property for less than the amount of the mortgage balance as a means for a mortgage lender to reduce its losses.

VA Mortgage: a mortgage loan guaranteed by the Veterans Administration providing veterans and/or their surviving spouses with a federally guaranteed loan, often without a down payment requirement.

When you're looking for a mortgage, you'll probably speak with a number of different professionals. Here's a quick overview of what each of them does, and how they may help you in the loan process.

Mortgage Professional

Your Mortgage Professional is prepared to act as your primary guide throughout the mortgage process. S/he will provide you with detailed information so you can determine the loan that best fits your needs and will coordinate all your loan paperwork. To contact a Axcell Financial Mortgage Professional, click here .

Typically, Mortgage Professionals are responsible for:

• Assembling all required paperwork for loan prequalification. This is the process of providing financial and other information (such as employment history) by a prospective borrower in order for the lender to determine the loan amount the borrower may qualify for to purchase a home.
• Preparing prequalification letters for you, which will show sellers how much you could qualify for a home loan and potentially provide you with an advantage if competing with other interested buyers who are not prequalified.
• Gathering your income, expenses, assets and obtaining a copy of your credit report. It helps a lender determine whether or not a potential borrower is a good business risk.
• Sending your information to a loan underwriter for review.
• Providing qualified borrowers with a loan offer and loan disclosures.
• Information given to consumers about their loans that explain loan fees, terms, and conditions.
• Working with title companies to schedule closing your loan.
• Attending the loan closing. This is the time and place at which documents for your loan are signed, dated, and notarized.
• Keeping you informed throughout the process and ensuring you fully understand your mortgage.

Your Real Estate Professional

Your real estate professional will help you find properties for sale that fit your budget and your needs. Your real estate professional may also:

• Write up your purchase offer and present it to the seller or seller's real estate professional.
• Guide you through negotiations with the seller and accompany you to the closing.
• Work with your lender to get them information they need about the home you've contracted to purchase.
• Help you understand the market you're looking in and provide comparable homes to review.

The Seller's Real Estate Professional

Sometimes also referred to as the "listing agent", the seller's real estate professional will work with your agent on the real estate offer, negotiations, and loan closing.

Underwriter

The underwriter is the person who decides whether or not their lending organization will approve your application for a home loan. They make this decision based on the information they receive from your loan application and supporting documentation, including the home appraisal.

Typically, your Mortgage Professional will communicate with the underwriter on your behalf. Unless you experience unusual circumstances, it's unlikely that you will be asked to contact the underwriter directly.

Inspector

An inspection is sometimes required by the lender to help determine the condition of a property. A third party conducts the inspection, which includes all major appliances and structural elements.

Appraiser

The appraiser provides a professional estimate of the fair market value of the property. The appraiser inspects the property for value -not for potential repairs- and reviews comparable sales information.

Title Company

The title company researches the title on the property. Before making a loan, a lender will usually require a title search or a title report to make sure the borrower will legally own the real estate. Based on the results, they will create a Title Report. This report lists current owners of the property and any unpaid debts or liens filed against the property.