Home Refinance Guide to a smooth closing

TURNING HOME REFINANCE INTO A

CELEBRATION

Achieving a

SMOOTH PROCESS Mortgage Application

REFINANCE CHECKLIST

THE STAGES OF THE MORTGAGE PROCESS A Smooth CLOSING

CELEBRATION

OUR MISSION Making The Home Refinance Process Simpler, Easier and More Rewarding For Our Clients The employees of Element Funding have generations of experience in real estate and financing and this has led us to create a process that is designed to help our clients experience a celebratory occasion rather than a sense of frustration about loan procedure.

Many of our referrals come to us because they have been frustrated by the mortgage process in the past. It is not necessarily the fact that the process can be tedious and cumbersome that causes this frustration. Everyone understands that borrowing hundreds of thousands of dollars requires careful consideration. In addition, everyone understands that mortgage companies are subject to regulatory supervision which is designed to protect the financial integrity of investors that fund these mortgages.

These people are frustrated because they don’t understand the process and their mortgage company did not communicate with them. That is exactly why we created this booklet. We want to start educating and preparing our clients from the very start. And our communication will not stop at this juncture.

Our Pledge to You We will continue to keep you informed throughout the process. This effort will include status updates and answering any questions or concerns you have.

Our process will be compliant with the letter of the law and regulations that guide the industry. Yet, we will never lose sight of the fact that the goal is to help our clients achieve the American Dream of Homeownership with a partner that is concerned with making the process something that is memorable for all the right reasons.

And if you have a concern, we pledge to work hard to make you more at ease with the process. It is our goal to become your lender for life. If we fund your purchase, we hope to be there if you desire to refinance your mortgage or purchase another home. If we fund your refinance, we want to make sure you we are helping you achieve your financial goals.

Our business is built on referrals and repeat customers. We understand that serving you is a privilege that we must earn and we pledge to work hard to earn your trust and confidence.

A DIVISION OF PRIMARY RESIDENTIAL MORTGAGE INC

THE STAGES OF THE MORTGAGE PROCESS Application In most cases you will be able to make application on-line, over the phone or face-to-face. The best method is complete the application on-line first. This will give us the opportunity to review the information and then set up an appointment to go over questions and fill in any details, questions or concerns that come up as you fill out the application package. This two-step process makes it more efficient and lessens the chances anything will be missed.

The more complete the package, the smoother the process. • The address to apply online is on the cover of this document. • Included in this document is a checklist of documents needed to complete the application. Our efax number is also included on the cover of this document or you may scan and email the documents.

Processing Once the application is received, it goes to the processing team. The processor will review the documents and order the appraisal, credit report and additional documentation, though the credit report is often ordered by the loan officer in advance of processing. The purpose of processing is to make sure the file is as complete as possible before the file is submitted to the underwriter. This may include submitting the file through an Automated Underwriting System (AUS) if not accomplished previously by the loan officer.

THE STAGES OF THE MORTGAGE PROCESS Underwriting When underwriting receives a complete package not missing any documentation, the process of making a final determination on the loan application can be accomplished quickly. When the mortgage is approved, it will typically be approved subject to standard conditions such as clear title on the property as well as any underwriting conditions which still remain. Processing secures these conditions before final signoff and sending the package to the closing department. If the underwriter can’t make a final decision, the file is sent back to processing to secure additional documentation before the final determination is made.

Closing: The Celebration It is Element Funding’s goal to submit paperwork to the Title Company or attorney as quickly as possible so that our client has access to their closing documents before the date of closing. We recommend reviewing the papers -- especially the HUD-1 Settlement Document -- at least one day before closing. This makes closing a much smoother and less stressful experience. Many times your Element Funding Loan Officer will attend settlement to partake in the celebration or if this is not possible, call in to see if they can be of assistance.

ACHIEVING A SMOOTH PROCESS You Can Help We recognize that every American has a choice when it comes to fulfilling their home finance needs. We are chosen by thousands of homeowners each year because of our reputation for recognizing the importance of delivering superlative customer service. We believe that this transaction should be treated with the respect it deserves and our mission is to make the American Dream of Homeownership a reality as part of a celebratory experience.

Communication is Essential • When we contact you with questions or for documentation, a quick response is important. Often, process can be slowed considerably if we don’t receive an answer expediently.

• This communication includes forwarding any documentation requested by us as quickly as possible. And when you send documentation, please let us know so that we can look out for the documents and make sure they are received properly.

• Make sure you ask any questions you have--

It is not a bother to answer questions from our clients, it is a privilege.

Track Your Documentation • Keep a copy of all financial activities -- including deposits, pay stubs, investment or bank statements and copies of any checks you receive. If you participate in “paperless banking,” don’t worry as you can obtain the needed documentation on-line.

• Any large increase in your bank accounts will require explanation and supporting documentation to show the source of funds.

• Copy your canceled Earnest Money Deposit check (front and back) when it clears your bank and e-mail it or e-fax it to our team.

• If you have a relative who will be giving you a gift to buy your new home, this requires special handling so let us know in advance and we can discuss what will be needed to document and track this gift.

• If you liquidate a mutual fund, stocks, CD or other investment for your downpayment or closing cost, you should allow two weeks to effect the transaction and remember to make copies of the records.

• Originals of some documents may be required -- be sure to retain copies for your records.

MORE WAYS TO HELP Don’t Change a Thing!

• If there are any changes in your financial situation or within the transaction, please notify us as quickly as possible. While the changes may not have a bearing on the work we do, sometimes we will have to make adjustments because of changing circumstances and we can only do so when we are informed of such changes.

• It is important to postpone any major purchases you may be tempted to make until after your settlement.

We understand you may be shopping for furniture or even purchasing a car while refinancing, but this may affect your qualification for the mortgage.

A Smooth Closing Celebration • We should receive a copy of your insurance policy early in the process so that we can review the document. You can use your present company to insure your home, however, if you would like a recommendation from us, we will be happy to help you in this regard.

• Schedule your closing with the attorney or title agent as soon as possible and let us know of the targeted closing date and time. Pick any day other than the end of the month to close. You are not saving any money by closing that day and you’ll find that your closing will be much less stressful by not closing the same day as almost everyone else in America.

• If the expected date or time of loan closing changes, please contact us immediately. Any change in timing may cause details of the transaction to be adjusted and any delay in notification could cause the closing date to be delayed further.

• At closing please make sure you have your Driver’s License or Passport with you so that documents can be properly notarized.

• If you are bringing money to closing and the amount is more than $1,000.00, you will need a cashiers or certified check at closing made payable to the Attorney or Title Company. You will be provided the exact amount needed prior to closing.

• Let your attorney or title agent and us know immediately if you and/or your co-borrower will not be present at the closing.

MORTGAGE APPLICATION PURCHASE CHECKLIST Our goal is to facilitate a smooth transaction for each and every one of our customers. Having correct and complete information upfront is a key to a stress-free home finance experience. This checklist will help you prepare so that we can serve you more efficiently.

Personal Identification m Legible copy of Drivers License or Passport m Legible copy of Resident Alien Card if not a U.S. citizen m Credit Card Authorization Form for appraisal and credit report payment included in package.

Present Property m Copy of lease for present home if you are renting out your present property. m Mortgage statements showing tax and insurance payments, principal balance and total payments for all loans you are paying off through the refinance or re-subordinating. m Copy of the Mortgage Note(s) for all loans you are paying off or re-subordinating. m Credit Card Authorization Form for appraisal and credit report payment (included in app package). m Copy of present Owners Title Policy from previous purchase or refinance, which may entitle you to a discounted “reissue” rate. m Contact information for your Title Company and Homeowners Insurance Agent Employment & Income m W-2s or 1099s for the past two years. m Most recent pay stubs covering 30 days of

employment. Must include employers name and

year-to- date income.

m If self-employed or you have rental, commission

or other variable income—two years signed federal tax returns.

m If self-employed - year-to-date profit and loss

statement if returns do not cover the previous quarter. m Federal Corporate or Partnership tax returns for entities owned. m Diploma or transcript if full-time student during past two years. m Leases for current rental properties owned. m Divorce decree and evidence of 12 months proof of receipt of payments for child support/ alimony (only needed if you desire to use this income to qualify). m For retirement or social security income -- a copy of the latest annual disbursement/ distribution statement and most recent 2 years 1099 statements Assets & Liabilities m Statements covering transactions for the past two months for all bank, stock and retirement accounts. One statement if it covers a quarterly period. m If liquidating stocks to effect transaction or pay down debts, proof of liquidation must be supplied as well as evidence of deposit of funds into a liquid account. m Name and address for any private mortgages or loans outstanding. m Account information (balances/payments) for all credit cards, auto loans, mortgages and other loans. m Copy of ratified divorce decree or separation agreement for alimony or child support owed.

Note: If no items are checked, please provide all documentation that is applicable.

WRITTEN EXPLANATIONS TO PROVIDE Sometimes the documentation you provide uncovers questions that are not apparent from reading the materials. It is very important that you let us know what situation occurred to make a document consistent with your real situation. .

Please provide us with a written explanation that explains these types of situations— • Why your income may have fallen from one year to the next. For example, if you earned $70,000 two years ago and $50,000 last year, what caused the drop? How might that situation be considered a one time decrease? Perhaps you were attending school last year and earning a graduate degree. Now that you have achieved the degree, you can return to working a normal schedule and your income may have increased from even two years ago.

• Complex job histories. Complex job histories are especially difficult to decipher from a form. Perhaps you went from self-employed to salaried employment during the past two years. Or perhaps there was a gap from when you left your last job to when you started your present job.

• Larger deposits that show up on bank statements. Any significant deposits that are not explained through your regular payroll earnings should be explained. When reading the statements, the lender has an obligation to make sure that no money has been borrowed which is not reflected on your credit record.

• Deductions that show up on your pay stubs. If you have a credit union loan, union dues or other liability paid through your employer, you need to alert us to the existence of this liability.

• A missed payment on your credit report. Even a minor missed payment should be explained because if the credit report is inaccurate, you may have an artificially low credit score which could increase the rate of your loan. Often we can make corrections if you explain that the late payment was in error.

• Why a bank statement or other document may have a different address. Any discrepancy in address, name or other identifying information should be explained.