Financing
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Prequalification

  • Establishes how much you can afford to borrow
  • Is not an assurance of mortgage approval
     

Preapproval

  • Is a firm decision on a home loan
  • Makes you a “cash buyer” in the seller’s eyes
  • Gives you increased bargaining power

Keep in mind that many people are prequalified or preapproved for much more home than they can afford.  You will want to find a house payment that is comfortable within your budget.

In a competitive situation you will need to be ‘underwritten’ and I can help you through that process.  Preapproval means that you are a serious buyer and will help us create a stronger position in the negotiation phase.

 

Two popular types of mortgages

Fixed rate and adjustable rate each have advantages to consider.

Fixed Rate Mortgages

  • Have the same interest rate for the entire term of the loan
  • Payments are stable and predictable
  • Usually, higher interest rates than others
     

Adjustable Rate Mortgages (ARMs)

  • Have interest rates linked to a financial index that changes periodically over the life of the loan
  • Initial payments may be lower, making the ARM more affordable

There are literally hundreds of loan products available today.  An experienced, reputable loan officer can help you select the right loan product for you.

The financing process

Financing your home is an involved process.  It is imperative for every buyer to be as involved as possible in this process.

  1. Loan application is completed and submitted to lender
  2. Lender orders appraisal, credit report, verification of employment and assets
  3. Lender provides a good faith estimate of closing and related costs, plus initial Truth In Lending disclosures
  4. Lender evaluates application and support documents, approves loan, and issues letter of commitment
  5. Within a week or two prior to close of escrow, loan documents are signed
  6. Within a day or two prior to the close, the loan is funded
  7. Lender disburses funds to the settlement or closing agent, seller is paid and title to the home is yours
  8. Required documents are recorded at the county office of records

 

Applying for a mortgage

The lender may request copies of:

  • Current pay stubs
  • Bank statements
  • Credit card statements
  • Investment/brokerage firm statements
  • Loan statements
  • Tax returns, usually for two years
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