Super Bowl is over and Now it is time for Part 4 of the Process.

Well the much anticipated Super Bowl is now over and the Green Bay Packers were the big winners. Will rates make an adjustment based on which team won? That is not a belief that I share but history shows that there will be rate movement after the big game is done. Not right away but slowly after...so lets keep our fingers crossed. The economic data that has been coming out has been good for interest rates but bond traders have not reacted the way we would expect them to.

So every thing is gathered for your loan and documented. The loan officer spots check things and then so does the loan processor. Your debt to income or DTI as they call it will be spot checked to make sure it meets the constraints. This number is the amount of debt that you have plus the housing payment in relation to your income. Of course the amount of your down payment or ability of down payment will be looked at as well as this will determine what financing may be available to you. And then finally the credit score is the big one that comes in to play. The credit score has become a much larger piece of the loan approval process then it used to be as most loan types require a higher score then even a year ago. These 3 factors are the main components that are looked at as a whole in addition to the actual property itself. With these 3 all items are considered for a loan file and the underwriting takes all of them in to account. A strength in one area can help offset a weakness in another.

Now the combination of these same 3 items can decide what the best route of mortgage financing is right for you. With the big mortgage crisis fall out that we have had we are basically back to the basic loan programs that have been around for some time.

Conventional Loan Program - These are not backed by the government and typically require a larger down payment. There are still some specific programs that allow for a smaller down payment but they have some restrictions. Loans with less then 20% down will require mortgage insurance.

FHA Loan Program - These programs were originally designed as a home affordable program for first time buyers especially but is widely used by move up buyers as well. Many of the guidelines for this type of loan are much more liberal then those for conventional loan programs. These loans regardless of the initial down payment will have mortgage insurance.

VA Loan Program - A loan program designed for those that have served in our military, this loan typically requires no down payment what so ever. It does have a small mortgage insurance premium that is referred to as a funding fee.

Under these loan programs there will be options for fixed rate as well as adjustable rate loan programs. The type that works best for you will be determined on your preferences and your constraints.

Next up....Loan Approval and the basic process flow to expect.