Happy New Year Everyone!
I am wishing you and your families a Wonderful Year Ahead!
Whether you have already decided to buy a home this year or just
thinking about it, please think meaningful and thoroughly before proceeding!
The Know Before You Owe rule does not change the
importance of preapprovals or pre-qualifications.
The more time and effort you invest in learning about home loans
and defining what you want and what you are capable of financing before you
select a home, the smoother the path from contract to closing will
be.
Suggestion: Print this Article, discuss with your
family, and put it on the refrigerator to help you stay focused on a
very big Goal for 2022!
Because the Pre-Approval
step is the most important, I wanted to outline what a thorough Pre-Approval
looks like.
the PRE-APPROVAL Process:
- Credit,
visit www.annualcreditreport.com and take a
look at your credit, review with spouse, if applicable, take notes for
important questions, follow up and repair any outstanding issues, pay down
debt, or establish credit if deemed necessary.
- Work with an
experienced and professional mortgage professional that
understands the importance of a thorough pre-approval and is willing
to do the work! Most of them are not, sadly enough!
- Mortgage Loan
Application, 10 to 20 minutes or longer if done right! During this
process, a conversation about what you want and a monthly
mortgage obligation you can live with - afford!!! What
your goals are regarding your pending home purchase should be thoroughly
discussed. Loan options are discussed, different scenarios, as well as your
questions and concerns.
- During the
application process, this is a perfect time for the mortgage professional
to spot any potential issues that need to be repaired
and resolved for qualifying.
- Next, specific
documentation is requested for review. Proof of Funds for
down-payment and closing costs as well as Income documentation which
includes Tax Returns, W2's, 1099's, paystubs, and more depending on
sources of income.
- A thorough
underwrite of the Assets and Income is completed by a qualified
processor and/or underwriter, not just the loan originator.
- Once
underwriting is complete, a "Soft-Pre-Approval" is
discussed, typically over the phone (no credit pulled and no
automated underwriting completed). Discussion regarding your qualifying
profile, different down-payment and loan options, max purchase price and mortgage
payment scenarios, estimated total funds needed to close, and so much
more.
- "Hard
Pre-Approval" - when you are ready to move forward to the final
pre-qualification stage in order to obtain a Pre-Approval
Letter and start shopping for a new home, then at
this point, it is time to run credit and run automated underwriting
through Fannie Mae or Freddie Mac and achieve the Approve Eligible
response needed to qualify.
- Pre-Approval
Letter - Ready,
set, go Shopping for a New Home! Once the Pre-Approval process is
complete, a professional Pre-Approval Letter on company
letterhead is provided which can be used to enter a home for viewing and
presenting offers to purchase.
- Competitive Edge in the Market - having a Pre-Approval Letter gives you a huge advantage when you make an offer - shows the sellers you are prepared and serious to purchase and close the transaction.
- Offer
Accepted! Congratulations,
you are on your way to home ownership! Because the pre-approval process is already done, things should move quickly from this point on! Once Escrow
is opened by the Listing agent, you will be required to put in your
earnest money deposit into escrow, then escrow will provide the required
escrow and title fees to start the loan!
- Loan Process
Begins! Once
fees are received from escrow, the loan process begins and includes
registering your loan with the lender, getting disclosures signed,
submitting your loan for underwriting, achieving Lender Loan Commitment,
clearing conditions for closing, signing loan documents, funding, and
recording. The really fun part is when the loan records and your realtor
gets to present you with the KEYS TO YOUR NEW HOME.
- Whew, you did
it! You
did your due diligence up front! It paid off with a smooth and efficient
loan closing, a closed Purchase transaction and the reward of home
ownership!
I am here if you have questions?
Lisa Baniahmad
Broker Associate at Keller Williams VIP Properties in Valencia, CA
Call Lisa direct at 818-359-4145, feel free to email your
questions at Lisab@thebanigroup.com
Please visit www.thebanigroup.com
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