Financing Your Property—the Right Way!
Unless the home is paid fully in cash, then there is probably a financial block that you must have to pass. Usually, the process gives the buyer a certain time period to get financial help. Most of the time, the buyer will have a total of 35 days for financial help. Five days to apply for the loan and 30 days to get it approved. Even though the time period is short, you must think of it from a seller’s point of view. They are taking the property off the market just for you, so you better be able to pay for the property. In this time, they could have gotten other lucrative offers, so the seller cannot afford to wait too long.
If the contract is depending on the financial aid, then the seller needs to know the status quick. The sooner the buyer can pay, the sooner the property is theirs to own. But, the sooner the seller finds out that the buyer does not have the financial credentials to purchase the home, and cannot get approved for a loan, and then the sooner they can put the property back on the market. One requirement for most lenders is to go through the appraised process. But, all appraised processes do not depend on the property.
Usually, the appraisal will be greater than or equal to the price of the property. But, when the buyer makes a down payment of 31 percent or higher, then the lender will be approved even if the amount is not as much as the amount stated on the contract.
After the lender has scrutinized all of the documents regarding the loan, then the loan will be cleared to close. In other words, if all of the financial conditions are met, the loan will be approved. Usually, the lender will transfer the funs on the day that the loan is closed. Before the closing, a statement which is known as HUD-1 is reviewed by both parties: the buyer and the seller. It simply has all of the financial terms, amounts, and conditions.
Before closing, an experienced professional from a real estate team will scrutinize the closing statement to ensure that it is fully accurate. We guarantee that we will always guide both the buyer and seller with their closing statement. That way, there will not be any unexpected surprised that can end the closing of the loan.
Financing a Property Requires Many Needed Steps
There are many different ways to handle the buying process and financial relief. Majority of the sellers will ask to see a pre-approval accompany on all offers for their property. For that reason, it is smart to apply for a loan before you buy the home. This step will help you with your financial understanding.
Many times, the buyers’ agents will request to see a mortgage loan pre-approval. That shows the real estate agent that you are seriously considering purchasing the property. Also, most of the sellers will ask the buyer to show proof of funds, so they know if they should take their home off the market or not.
The internet can easily provide you with links to Mortgage calculators, so you can see what you can afford and exactly how much money you will get. But, it is better to meet with a Mortgage Broker, Loan Officer, Bank, or Lender. They will give you the best information which on which loan is the best for you.
Among the following is a list of items you should bring to your meeting. Keep in mind; it can change depending on your loan program. The list includes:
• Copies of your paycheck or paycheck stubs that are within the last 60 days.
• Copies of your W-2’s and/or 1099’s that are within the past two years.
• Copies of your Business and/or Personal Tax Return in the last two years which have been signed and completed.
• Copies of Bank Statements within the last few months that have been completed
• An Original Gift Letter and the documents and the documents associated with fund transfers for cash gifts that have been received regardless of whether the gifted funds are part of the purchase or not.
• A copy of Fully Executed Signed Purchas Agreement and any Addendums.
• A check for the Application Fee
• Your Homeowner/Hazard Insurance Agent’s name, phone, and your premium amount.
• A copy of a Recorded Warranty Deed for the current property owned and to be sold.
• A Copy of the Certified Survey for the current property owned and to be sold;
• A copy of the existing Title Policy that is for the current property owned and to be sold.
• Copies of signed current lease(s), Driver’s License(s), Social Security Card(s), and Green Card(s)
• Copies of complete Investment Account statements; Copies of complete investment account statements, and copies of your most recent loans and leases.
Shopping for homes will be much easier once you have been pre-approved for a loan. You will be more confident when making your offer because you will know how much you will have to pay monthly.
Once you have applied, all of the documents that the lenders give will be sent to you. You will receive a Good Faith Estimate, also known as GFE, which is one of the most important documents. The document estimates all of the final costs regarding your loan. The GFE will also provide you with more estimates pertaining to your annual, monthly, and other interest payments regarding your loan.
Please do not be shy and contact us. We are always here to give you more information and answer your questions about the process of home buying.
About the Author: Joe Lane -