A Helpful Guide to the Residential Mortgage Lending Process For many, buying a home is the largest financial investment you will make during your lifetime. It is a financial as well as a lifestyle decision – and one that can be as overwhelming as it is exciting.

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Cadence Mortgage is a division of Cadence Bank NMLS#525022

Navigating the Residential Mortgage Lending Process To help you navigate the residential mortgage lending process, the mortgage experts at Cadence Bank have compiled this helpful guide that addresses: • Steps to closing a mortgage loan • Documentation your lender requires • Credit tips to help you get the best possible interest rate • Myths of buying vs. renting • Knowing when it’s the right time to refinance

Understanding what to expect when applying for mortgage financing can help make your home-buying experience a walk in the park… and turn your dream of homeownership into a dream come true.

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Steps To Closing Your Mortgage You have chosen a lender, submitted a mortgage application, received your Loan Estimate and are now jumping head first into the mortgage lending process. While every lending situation is unique, there are three general phases your loan will go through no matter which lender you choose.

Processing During the processing of your loan, your lender will ask you to provide supporting documentation for the information you provided on your application. For example, bank statements, pay stubs, tax returns, etc. Your loan processor also will work with you to set up any necessary third party inspections of the property, such as appraisals and pest inspections. The duration of the loan-processing phase will vary depending on the loan program you’ve chosen, the schedules of third party inspectors and the timeliness of your response to requests from your loan processor.

Underwriting Review Once the processing of your loan is complete, it will be submitted to Underwriting for review. During this phase, your application and documentation is reviewed to make sure that everything falls within the guidelines of the loan program that you have chosen. There may be situations where you are asked to provide additional supporting documentation beyond the information provided in your application. As always, the timeliness of your responses to these requests is important to minimize delays in the loan process.

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Steps To Closing Your Mortgage - cont’d Closing Once Underwriting has approved your loan, it will be submitted to Closing for final document preparation. You will be provided with a Closing Disclosure (CD) at least three days prior to your closing. It is very important that you take the time to review the CD carefully. It provides you with valuable information regarding the loan on which you are about to close. If no revisions are necessary, your loan will be given the clear to close and will be submitted to the closing agent, title company or closing attorney in accordance with the customary closing procedures for the state where your property is located.

Key Takeaways One of the most important elements of the mortgage lending process is to have a trusted lender by your side to help guide you along the road from application to closing. It is equally significant to remember that open communication is central to a smooth and pleasant loan processing experience.

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Your Dream Come True Submitting a mortgage application is just the beginning. Once your application has been submitted, you will be asked to supply a number of supporting documents to help your lender assess your financial situation and determine if you qualify for the loan you have requested.

To make your experience as hassle-free as possible, be prepared to provide the following to your mortgage lender: • Your driver’s license or other government-issued photo ID • Your most recent statements on all checking, savings, stock, mutual funds, IRA and other liquid asset accounts • Your most recent paystub (showing 30 days of income) as well as your most recent filed Federal tax returns, with all schedules and W-2 forms • If you are self-employed, have irregular income or earn more than 25 percent of your income from commissions or 1099s, the last two years of Federal tax returns (with all schedules) as well as the last two years of business returns (including K-1s) • Documentation pertaining to any credit disputes you may have had, or are currently having, with a creditor, even if the dispute is not resolved • Loan information on other real estate owned • Sales Contract, if available • Addresses and landlord/mortgage company information for the past two years • If you have previously filed for bankruptcy, a copy of all bankruptcy papers with a copy of discharge • VA Loans require Certificate of Eligibility and DD-214 or Statement of Service

Note: This is not a comprehensive list of all documentation that may be requested during the mortgage application process.

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Credit Do’s and Don’ts During the Loan Process Good credit is critical when it comes to securing the best interest rates and terms on a mortgage. Here are some Credit Do’s and Don’ts when looking for mortgage financing: • DO stay current on existing accounts. One 30-day notice can cost you. • DO continue to use your credit as normal. Changing your pattern will raise a red flag and could lower your credit score. • DO call your mortgage professional before making any address or credit changes. • DON’T apply for new credit. Every time you have your credit pulled by a potential creditor or lender, you can lose points from your credit score. This includes co-signing for a loan. • DON'T max out credit cards. Try to keep your credit card balances 30 percent below their limit during the loan process. If you pay down balances, do it across the board. • DON’T consolidate your debt. When you consolidate all of your debt onto one or two credit cards, it will appear that you are “maxed out” on that card and you will be penalized. • DON’T close credit card accounts. If you close a credit card account, it may appear that your debt ratio has gone up. Closing a card may affect other factors in the score, including credit history. • DON’T pay off collections or “charge-offs”. If you want to pay off old accounts, do it through escrow. Request a “Letter of Deletion” from the creditor.

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Buy vs. Rent There are lots of things to think about when you are considering buying a house, and finances play a big role in that decision. Many renters can afford to buy a home – they just don’t realize it.

When you’re caught at the crossroads of renting vs. buying, consider these common misconceptions: Do you think: • You need a lot of cash to buy a home? • Your monthly payment would be more than you could afford? • You’re self-employed and may not fit into the “box” of traditional financing? • You won’t qualify because you’ve just graduated from college and have your first job? Keep in mind: • Low cash required loan options are available. • There are loan choices that offer lower payments. • Cadence offers portfolio loan products for some requests that may not fit into traditional financing programs. • There are first-time home-buyer programs available; Cadence even offers special programs for new professionals within five years of graduation from a college/university.

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Is Now the Right Time to Refinance?

Already own a home? That doesn’t necessarily mean your mortgage journey is over. As your financial situation evolves, you should consider the potential benefits of refinancing. But how do you know if it’s the right time to refinance? It could be, if… •

Your adjustable rate mortgage payment is increasing.

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You want to consolidate credit card and other high-interest revolving debt.*

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Your current interest rate is higher than today’s rate and you want a lower payment.

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You want to “cash out” equity to use for college tuition, vacation or home improvements.

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You want to shorten the term of your loan.

* Consult your financial advisor about the consolidation of short-term debt into long-term debt. State of Texas applicants should check with their lender for program guidelines.

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Let Us Help! The Mortgage experts at Cadence Bank are here to help you navigate the mortgage lending process. Our professionals bring extensive industry expertise and a customer-focused approach that can make your journey a positive one.

We know your financial picture is unique, and we can help you find creative solutions at competitive rates to buy your first house or your dream home, a vacation property, even make home improvements.

Learn more about Cadence Bank’s mortgage options at: cadencebank.com/mortgage

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All loans are subject to credit approval. Loan terms and availability subject to change. Your experience regarding loan processing, underwriting and closing of any residential mortgage loan for which you apply may vary from that of other borrowers based on your particular circumstances. Therefore, this e-book is for general informational purposes only and we make no representations or guarantees as to the accuracy, completeness or timeliness of the information in this e-book. Information herein is not intended to provide accounting, legal, tax or other advice, and you should seek advice from your own accounting, legal, tax or other professional advisor if you have specific questions regarding residential mortgage loan issues relevant to the expertise of such advisors.

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