Mortgage Process
- Consult with a mortgage broker to understand qualifications, conditions, loan limits, and debt ratios
- Submit proof of income and credit report to obtain pre-approval
- After attorney review, provide all mortgage-related documents to the lender
- The mortgage company orders a third-party appraisal
- If appraisal matches contract price and application is approved, receive the Mortgage Commitment Letter
- Lock in the mortgage rate within 30 days of closing
- Obtain property insurance as required by the lender
- Review the Closing Disclosure from the mortgage company
- Sign all mortgage documents at closing
Mortgage Documents
- Proof of Income – 2 years of tax returns, W2 Form, or 1099-Misc Form
- Proof of Employment – 4–5 recent pay stubs
- Proof of Funds – Bank-issued statement showing down payment funds available
- Identification – Photo ID
- Social Security Card
- Credit Report or agreement to Credit Review
- Proof of Business – Required if self-employed
Types of Loans
Conventional Loan
A home mortgage not insured by a government agency. Typically requires a minimum credit score of 620, with 740+ needed for the best rates. Terms are usually 15, 20, or 30 years. Down payment and income requirements follow Fannie Mae and Freddie Mac standards.
Jumbo Loan
Exceeds conforming loan limits set by FHFA. Not eligible for Fannie Mae or Freddie Mac backing. Limits vary by area; higher thresholds apply in many New Jersey counties. Used for high-value properties above standard loan limits.
FHA Loan
Backed by the Federal Housing Administration. Requires as little as 3.5% down with credit scores as low as 580. Borrowers must pay PMI until 20% equity is reached. Loan limits apply (around $765,000 in northern NJ counties).
FHA 203K Rehab Loan
Combines purchase and renovation costs into one loan. Available for primary residences only. Limited 203K covers up to $35,000; Standard 203K covers larger projects and requires a consultant.
Adjustable Rate Mortgage (ARM)
Begins with a fixed interest rate for a set period, then adjusts periodically. Rates vary over time based on market conditions. May offer lower initial rates compared to fixed mortgages.
Fixed Rate Mortgage
Offers predictable monthly payments with a fixed interest rate for the entire loan term. Protects borrowers from rising interest rates.
VA Loan
Guaranteed by the Department of Veterans Affairs. Available to eligible veterans, service members, and spouses. No down payment or mortgage insurance required, though a VA Funding Fee applies (can be rolled into the loan).
Fix & Flip Loan
Short-term financing for real estate investors to purchase, renovate, and resell properties. Typically offered by banks or hard money lenders, often requiring collateral instead of credit/income qualifications.
Non-QM Loan (Bank Statement / Portfolio Loan)
Designed for borrowers who don’t meet traditional financing requirements. Offered by select banks with higher down payment and credit requirements. May carry higher interest rates or fees but provide flexible qualification standards.
