FAQ's about Loans and the Loan Process
We have been asked many questions about the loan process by borrowers like yourself. For your convenience, we have compiled a list of our most frequently asked questions and answers.
1. I have been allocated a campus housing unit on the Malibu campus. How do I begin the loan process?
Once you have been allocated a campus housing unit, the next step would be to contact the Real Estate Operations office to get pre-qualified for a home loan with the Preferred Lender. Allocation of a unit does not constitute loan approval; you will need to complete a standard mortgage loan application to know if you are financially qualified to purchase a home.
2. What is the difference between getting pre-qualified and applying for a mortgage?
A pre-qualification indicates that the lender has determined you are financially qualified for a loan. Applying for a mortgage will determine if you, and the unit you would like to buy, meet the lender's standards.
3. Can I finance 100% of my purchase price with a home loan?
100% financing is not available with a home loan. Financing can be provided for up to 80% of the purchase price.
4. Is there any cost to apply?
There is no cost to get pre-qualified for a home loan. However, when you do get a home loan, there are lender fees charged by the Preferred Lender. You will also be responsible for closing costs associated with your loan which typically include escrow and title fees, and other miscellaneous fees including overnight delivery, recording and notary fees, etc.
5. Will you check my credit when I complete the loan application?
Yes. One of the forms that you will sign when applying for a loan authorizes the lender to order a credit report. A credit report allows the lender to gain an accurate financial profile quickly.
6. What criteria do you use to evaluate my loan application?
Based on the information you submit in your application, we complete an analysis of your financial situation, including calculating income-to-debt qualifying ratios, reviewing your credit history and outstanding liabilities, employment history, current income, availability of assets for the downpayment, including closing costs, and your financial reserves.
7. How long is the whole escrow process?
In general, you should allow 45 days from the time you sign the purchase agreement until close of escrow. In certain instances, however, it may be possible to close your loan in less than 45 days.
8. When will I know the exact amount of money I will need at closing?
You will receive an estimated closing statement from Real Estate Operations at least 48 to 72 hours before your loan closing regarding the amount of funds needed to close the transaction and the acceptable payment method. In general, the funds you bring to closing must be in a certified form, such as a certified check made payable to Pepperdine University or a wire transmittal.
9. What happens at close of escrow?
Prior to closing, you will be reviewing and signing several sale and loan documents, including the Promissory Note and Deed of Trust. The closing is finalized upon recordation of the Grant Deed and Deed of Trust at the applicable County Recorder's Office.
10. What fees are typically included in closing costs?
Closing costs are expenses over and above the price of the property. Closing costs include all escrow and title insurance fees, property taxes, city transfer taxes (if any), prepaid interest due, other miscellaneous fees including, but not limited to, overnight delivery, recording, notary fees and loan-related charges (appraisal, credit, tax service, flood certification fees). Closing costs usually amount to between two and four percent of your loan amount.
11. How do I make monthly payments on my loan?
You will need to sign a form to authorize the Preferred Lender to debit your bank account for the payment amount each month through an Automated Clearinghouse (ACH): An electronic funds transfer network that enables direct money transfers between participating bank accounts and lenders.