Mortgage & Home Loan Guide

At Merchants Bank, it's our mission to make the home buying process as easy as possible for you. Whether it's been several years since you've gone through the process, or you're a first-time home buyer, we have the resources to guide you through from start to finish.

What to Expect During the Home Loan Process

1. Initial Conversation

Speak with your Merchants Bank mortgage lender about your financial needs, goals and situation to determine next steps and how much you may qualify to borrow.

Your lender will discuss with you what is needed for your pre-approval application. You will be asked to provide:

Information on your income, assets, liabilities and real estate owned. When applying, you'll specifically want to be prepared with:
- W2's and federal tax returns for the past two years
- Most recent pay check stub covering the last 30 days
- Two most current months account statements for bank and investment accounts (all pages)
- Recent 401(k) or retirement statement
- Driver's license or photo ID
Written consent(s) to pull your credit report(s). Please note that as part of this process your information becomes available to other companies through either purchased lists from a credit bureau or as part of the public record. It's likely you will receive unsolicited offers, which can sometimes mean dozens of unwanted phone calls. If you'd like to opt-out of other credit/financing solicitations, we recommend opting-out via the Opt-Out Prescreen website. You will need to provide your name, address Social Security Number and date of birth.

Your mortgage lender will review your numbers to help you understand your financing options and provide a documentation checklist to help you feel prepared for additional information you may be asked to share throughout the process.

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2. Apply for Pre-Approval for Your Home Purchase

Real estate professionals and the home sellers they represent often require confirmation of your creditworthiness and your ability to purchase for a given price (at contract).

Now is the time to apply for mortgage pre-approval, either online or by contacting a mortgage lender. Pre-approval is critical and more important than pre-qualification because it utilizes credit and preliminary underwriting approval. Once you have applied for pre-approval, you will need to provide the requested documentation (see next step).

A pre-approval letter¹ will elevate your home buying status and strengthen your offer. Once you have it, you’re ready to shop for a home with confidence.

3. Provide All Requested Documentation

Your mortgage lender will advise you of the specific documents required for us to underwrite and approve your mortgage. It’s important to submit the required documentation as quickly as possible to ensure a smooth process and on-time closing.

4. Find Your Home & Make an Offer

Work with a real estate agent for valuable direction and market expertise. Your pre-approval letter will help your agent negotiate with the seller on your behalf — it shows everyone that this is a “real deal.”

5. Sign the Purchase Contract/Purchase Agreement

Regardless of who writes up your purchase contract (a real estate attorney, title company, etc.), they should be fully aware of important negotiating points or contingencies to include in the contract, such as allowing you to renegotiate the contract if a major defect is discovered at inspection.

You may be required to advance a “good faith deposit” or “earnest money” when you sign the contract. This payment will be considered part of your down payment if you are making one.

When determining the closing date on your offer, talk to your mortgage lender.

5. Get a Home Inspection

We encourage you to hire a home inspector to evaluate the condition of the property. Sales contracts are usually written “as is,” so it’s important to know what you are buying.

7. Finalize the Application

When you finalize your mortgage loan application, be sure to ask your mortgage lender about anything you do not fully understand.

8. Receive and Review the Disclosure Package

Your mortgage lender will continue to work with you through loan closing.

You will be given a package of disclosures including a Mortgage Loan Transaction Loan Estimate and other information about your financing within three business days of your application. It’s important for you to review these materials and confirm that the terms shown match your expectations. After you have reviewed initial disclosures, certain fees will be due, which vary by area. We’re here to answer any questions you may have.

9. Appraisal and Title Search Ordered

Your mortgage lender will order an appraisal of the property and follow up with your attorney or a title agency representative to ensure that a title commitment is ordered. If you are refinancing, you or someone else may have to be available to give the appraiser access to the home.

You will receive a copy of your completed appraisal.

10. Communication Throughout the Process

Your mortgage lender and his/her home loan processor are here to answer questions and will be responsible for:

Providing you with the status of your mortgage application
Ensuring you have all the necessary contact information
Requesting any outstanding documentation or other items to facilitate your approval
Confirming and managing your closing date
If applicable, provide you with a Conditional Approval Letter.

11. Receive a Pre-Closing Mortgage Loan Transaction Loan Estimate

If your initial Mortgage Loan Estimate has changed, you may receive an updated Mortgage Loan Estimate. At least three business days before your loan closing you will receive a preliminary Mortgage Closing Disclosure. If there are further changes to your Mortgage Closing Disclosure, you may receive an additional Mortgage Closing Disclosure which could require another three-business day waiting period, which may impact your closing date.

These disclosures will have your Annual Percentage Rate (APR) and Total Interest Paid (TIP). If you have any questions about any disclosures you receive, contact your mortgage lender immediately.

12. Closing Date Set & Mortgage Loan Transaction Closing Disclosure Package Prepared

All involved parties need to arrange a date, time and location for closing. Your lender must provide you with certain disclosures before your loan can close, which may impact your closing date.

13. Obtain Your Certified or Cashier's Checks

You will be notified of the exact amount of money you will be required to bring to closing. Funds may not be required if you are refinancing.

14. Attend Your Closing

At closing, mortgage and closing documents will be reviewed and explained to you.

Most customers establish an escrow account at closing with funds that will cover future real estate taxes, homeowner’s insurance, and if applicable, your private mortgage insurance. If applicable, your lender will make these payments for you from this account when they come due.

Prior to closing, inform your mortgage lender if you would prefer to make tax and insurance payments on your own. But understand that many mortgages require an escrow account, and a fee may be charged if the escrow account is waived.

15. Select your Preferred Payment Method

At closing, you will receive instructions on the amount and timing of your first payment. You’ll also receive a document explaining your choices of automatic payment options to help with budgeting and/or paying down principal faster.

Choose your preference for automatic payments at closing or any time after. You may also make payments through Merchants Bank Online Banking or by check.

Congratulations! Now that you’ve closed on your mortgage, we’re happy to help you make your house a home and continue to meet your home financing needs as your mortgage moves into the servicing process.

16. Call Your Mortgage Lender or Loan Servicing Team

Feel free to contact your mortgage lender or loan servicing team if you:

Have questions, concerns, an issue, or if you can’t make a mortgage payment(s)
Want to refinance to change your rate or term
Want to borrow cash from your home’s equity
Are moving or buying a vacation home or investment property — your mortgage loan officer may be able to help you finance a home
Have a friend or family member who needs home financing — your mortgage loan officer may also be able to help them finance a home
Have a question about an escrow payment
Need to order loan payment coupons

If you’d like to learn more about how Merchants Bank Loan Servicing helps our customers after loan closing, read our Loan Servicing FAQs.

Tips to Help Guide you Through the Mortgage Process

Things Within Your Control

Provide complete legible copies as quickly as possible. Typical items include:

Paystubs (you need to have 30 days worth from the job you are using for income with year-to-date and company name).
W-2s and/or 1099’s for most recent two years.
Signed tax returns and all forms including attachments.
Bank/investment statements for your assets. Full statements including all pages (not just e-banking transaction printouts).
Purchase agreement, if purchase.
Signed gift letter, if you are receiving down payment funds as a gift. Any gift must have no expectation of repayment of these funds. We periodically verify this, so to represent otherwise would be fraudulent.
Cash nor unsecured borrowed funds will not be considered as sources for downpayment. For example, you may not take a credit card cash advance or use cash you saved at home.

Expect that more items may be requested based on whether what you provided raises more questions.

Things Within the Bank's Control

We commit to:

Timely ordering of your appraisal, once we have the purchase agreement/plans and specifications, your completed application and “Intent to Proceed” signed or verbal.
Provide timely disclosures of loan costs.
Ask you for the documentation required for your loan at the time your application is input.
Notify you of approval or non-approval and schedule your loan closing as soon as we have notification from our underwriting team.

Things Outside Both Our Control

Appraiser selection and title insurance are ordered from independent companies. We do not control their turn around time.
Comparable sales are a required part of the appraisal. The sale of properties similar to your subject property in the most recent 12 months is the function of the local market.

DO:

Notify your mortgage lender:
• If you have corrections or questions when reviewing your application or disclosures.
• Of changes in income, job, pay or work hours since you applied. This could impact loan approval.
• Of maintenance issues, issues identified in a home inspection or incomplete construction that may be present in the house you are financing.
• Of any unique home features (additional living quarters, large acreage, agricultural use, outbuildings, unique floor plans, etc.).
• If you have plans to initiate a dispute on your credit.
Continue to make all scheduled monthly payments on time, even those on accounts that may be paid off when this loan closes.
Select your homeowners’ insurance and provide the insurance binder and paid receipt to your mortgage lender as soon as possible.
Obtain a copy of your earnest money check if you are purchasing a home. We need a copy of the front and back once it has cleared your account.
Be prepared to provide additional documentation as a follow up to documents you submit to us.

Don't:

Apply for, accept or switch to any new credit cards or loans. If you are considering additional credit, check with your mortgage lender first.
Close credit cards since this can affect your credit score.
Begin home improvement or work projects to the home/property being financed prior to closing and recording of the mortgage. This includes excavation projects and demolition of structures on the site.
List the property, that is the subject of this loan, for sale. This can affect loan approval.
Co-sign for anyone else on a loan.
Move money between accounts or banks without consulting your lender first. This often makes the paper trail of funds harder to verify.
Pay off items without checking with your lender first.

All mortgage loans are subject to credit approval.

1. A pre-approval is based on our preliminary review of credit information only and is not a commitment to lend. We will be able to offer a loan commitment upon verification of application information, satisfying all underwriting requirements and conditions, and providing an acceptable property, appraisal and title report. Not available on nonconforming products.