Funding Your Home Purchase
Cash is always acceptable! But, those of us who don’t have hundreds of thousands of dollars available for a home purchase will need a home loan, also known as a mortgage. Don’t worry, that’s most of us. In fact, with interest rates so low there are people who could pay cash who choose to get a mortgage because they feel their money is better invested elsewhere.
It’s very important to work with a good lender – a lender who will help you determine a payment you are comfortable with, not simply your maximum loan amount. You’ll work very closely with your lender so don’t choose solely on interest rate. They change daily and you’ll drive yourself crazy trying to second-guess yourself. Choose a lender who communicates well and will get the loan closed on time. Ask Todd for recommendations.
The basic steps are as follows:
Financial pre-qualification or pre-approval
Why pre-qualify? Todd highly recommends buyers get pre-qualified before beginning their home search. Knowing exactly how much you can comfortably spend on a home reduces the potential frustration of looking at homes beyond your means and it makes your negotiating position stronger.
Application and interview; Buyer provides pertinent documentation including verification of employment. Credit report is requested. Appraisal scheduled for current home owned, if any.
Loan package is submitted to underwriter for approval
Loan approval
Parties are notified of approval;Loan documents are completed and sent to the title company.
Title company
Title exam, insurance and title survey conducted; Borrowers come in for final signatures.
Lender reviews the loan package; Funds are transferred by wire.