Residential Real Estate Loan Checklist

a) Current FT & PT pay stubs for the last 30 days,original W-2 & Tax Returns for last 2 years,proof of other income

b) Self employed Year to date balance sheet,income statements,3 years business and personal tax returns,1099's,W-2's,min 2 Years in  Business Proof by a CPA letter

c) Name,address ,phone,account #s,balance and min. monthly payments for all creditors

d) Original bank statements,401k,IRA,investment accounts (all pages) for last 2 months

e) Purchase Contract(DROA) & ,property info,construction contract,building permits,plans,insurance,etc

f)  If apply: Divorce Decrees,Alimony,Bancruptcy/foreclosure discharge for last 7 years

g) $500 deposit check

Commercial Real Estate Loan Checklist

The following is a general checklist of information we typically ask for when reviewing a commercial real estate loan (purchase). Please note that additional information may be required:

a)         Loan application – if owner / user

b)         Most recent 3 years subject property operating statements

c)         Most recent 3 years company tax returns OR financial statements (income statement / balance sheet) – if owner / user

d)         Most recent company accounts receivable and accounts payable aging schedules – if owner / user

e)         Most recent 3 years personal tax returns for guarantor(s) (anyone who owns

20.0% or more interest in the borrowing entity)

f)          Updated Guarantor Information form (enclosed) for all guarantor(s).

g)         Subject property information:

            - current rent roll

            - copies of all current lease agreements

- most recent appraisal (if available)

- most recent Phase I environmental report (if available)

- copy of the Agreement of Sale (if applicable)

h)   Some general "rules" regarding commercial real estate loans:

-The borrower is normally required to finance 25.0% of the purchase amount

-The Bank normally lends up to 75.0% of the subject property value OR purchase price, whichever is less.

-The Borrower's cash flow should (on an annual basis) support all debt payments, including the subject request, at least 1.20x (times)

-Loans terms are typically structured over 9-years (w/ 25-year amortization) or 10-years (w/ 25-year amortization)

In the 9 year structure, the interest rate changes every 3 years (3/3/3) with a balloon payment due at the end of the 9 year term.

In the 10 year structure, the interest rate changes every 5 years (5/5) or may be fixed for the entire 10-year period, with a balloon payment due at the end of the 10-year term.

i)   Projected fees* normally include (but are not limited to):

-Appraisal ($4,000 - $6,000)

-Environmental report ($3,000 - $4,000)

-Facility Fee - 1.00% of loan amount

-Documentation / other - varies depending on complexity of loan, typically

around 0.50% of loan amount

*These fees can be considered as part of the loan amount and may be subject to change

1 What types of documentation do I need for the application?
Based on the loan program you choose, the exact documents required will vary. In general, you should bring the following:

• Federal income tax statements and verification of any additional income
• Your two most recent W2’s.
• Current paycheck stubs
• Recent bank statements
• Asset and liability information (stocks, bonds, other real estate, etc.)

2 How do I know which type of mortgage is best for me?
There is no simple answer to this question. The right type of mortgage for you depends on many different factors:

• Your current financial situation
• How much you expect your finances to change
• How long you intend to stay in your house
• Your tolerance for having your mortgage payment changing from time to time.

3 How much of a down payment will I need?
Quite probably, less than you think. Many first-time buyers are surprised to learn there is no fixed answer to this question. Usually, down payments range anywhere from three to twenty percent of the property’s value.

4 What is escrow?
In addition to the principal and interest portion of your monthly payment, the terms of your loan agreement allow the lender to collect funds from you for the payment of your real estate taxes, insurance bills, and sometimes other items. These additional funds are referred to as the escrow portion of your payment. They are collected throughout the year and paid on your behalf.

5 What is amortization?
This is the lifetime of your loan. For example, most mortgages have an amortization of 30 years, meaning your mortgage will be paid off after 30 years.

6 Will my monthly payment always stay the same.
No, your monthly payment can change for the following reasons:
· Escrow Analysis - At least once a year, your lender will analyze your escrow account, and adjust the portion of your monthly payment collected for real estate taxes, insurance, and other escrow items. Your new monthly payment amount shown on the analysis will typically be effective on the anniversary of your first payment due date.
· ARM Adjustments - If you have an adjustable rate loan, the interest rate and principal and interest (P & I) portion of your payment will change on a scheduled basis based on its index. To determine when your new payment will become effective, please refer to your loan agreement. If you have an escrow account, the escrow portion of your payment may change as well.

7 How does the lender decide the maximum loan amount that I can afford?
The lender considers your debt-to-income ratio, which is a comparison of your gross (pre-tax) income to housing and non-housing debts. Non-housing expenses include such long-term debts as car or student loan payments, alimony, or child support. Typically, mortgage payments should be no more than 29% of gross income, while the mortgage payment, combined with non-housing expenses, should be no more than 41% of income. The lender also considers your cash available for a down payment and closing costs, credit history, and employment history when determining your maximum loan amount.

8 Do I really need homeowners insurance?
Yes. Proof of a paid homeowner’s insurance policy is required at closing, so arrangements will have to be made before then. Plus, involving the insurance agent early on in the home buying process can save you money. Insurance agents are a great for tips on how to keep insurance premiums low and information on home safety.

9 What is loan-to-value and how does it determine the size of the loan?
The loan to value ratio is the amount of money you borrow compared with the appraised value of the home you are purchasing. Each loan has a specific LTV limit. For example: With a 95% LTV loan on a home priced at $100,000, you could borrow up to $95,000. The higher the LTV, the less cash homebuyers are required to pay out of their own funds. So, to protect lenders against potential loss in case of default, the higher LTV loans (over 80%) usually require a mortgage insurance policy.

10 What are discount points?
Discount points enable you to lower your loan’s interest rate. They are basically prepaid interest, with each point equaling 1% of the total loan amount. By and large, when you pay a point on a 30 year mortgage, you can lower your interest rate by 1/8 (or.125) of a percentage point. When comparing loan rates, ask lenders for an interest rate with 0 points and then see how much the rate decreases with each point paid. Discount points are a good idea if you plan to stay in your home for some time since they will lower your monthly loan payment. Points are tax deductible when purchasing a home and sometimes you can negotiate with the seller to pay for some of them.

11 What is the difference between discount points and loan origination points?
You purchase discount points to lower your interest rate. Origination points are a fee paid to the originating lender which are part of the profit margin for the services that they provide. Both are measured as percentage of the loan amount and both are factored into the loan’s APR. Generally, points are deductible as long as the seller didn’t pay for them and origination fees are tax deductible provided they are expressed as a percentage.

12 What is the difference between the mortgage rate and the APR?
The APR (Annual Percentage Rate) of a loan is supposed to be an overall interest rate with all the applicable closing costs factored in. Unfortunately, not all lenders include the same costs so not all APRs are created equally. Use the APR as a general guide to the overall cost of the loan but keep in mind that you have to look at the details of what’s included to be sure.