Homebuyers sometimes really do not know the steps needed in financing their purchase.
The steps are:
Qualification, Pre-approval, Approval, Lock and Appraisal
Qualification or Pre-Qualification is a lenders opinion that your income, assets, and debts qualify you for a loan of a certain amount.
It is an opinion and does not take your credit into account and no one is committed. Lenders provide for free of charge and are interested that you will become a borrower.
Pre-Approval is a conditional commitment by a lender to make a loan before a specific property is found. The lender will verify information you provide and check your credit. The lenders commitment is always conditional but not yet disclosed.
Approval is a commitment by a lender to make a loan. A property is identified and the details of the loan are detailed. The type of loan, down payment and type of documentation.
Approval letters contain conditions which are a check list of details that must be completed before final documentation.
A lock is a commitment by the lender to a specified rate and points. Usually the lender lock at borrowers request and view the borrower as being committed.
An appraisal is how much a property is worth based on recent transactions of similar properties in the same market area with allowances for differences in properties. Mortgage lenders base the maximum amount they lend on any property on the lower of the purchase price or the appraisal. If the appraisal comes in lower than the purchase price the Buyer will have to make up the difference or the seller may reduce the price. In a sellers market the Buyer may be forced to make up the difference.
Author:Kathy Toonder Phone: 941-544-7270 Dated: May 20th 2017 Views: 2,414 About Kathy: I enjoy walking the warm sandy beaches, swimming and watching the magnificent sunsets on Florida’s...
View our latest blog posts in your RSS reader. Click here to access.
One sentence says it all: "Working from sign up till sign down...." We provide the best possible service to our clients with respect to buying or selling real estate, marketing, advertising, follow-up and negotiating the sale or purchase of your dream home.
Check Your Furnace/Air FilterDepending on the size of your house and w
"Your most memorable moment
Michaela went out of her way to find us the perfect property for a combination rental property investment and a family vacation spot. She searched each of the areas I requested thoroughly & kept in constant contact over several months with both personal phone call, sending appropriate listings, tracking down rental incomes and providing lots of area information & insights. she spent 10 hours showing us properties in several beach neighborhoods and was sooo informative and helpful.
The moment you'd rather forget?
None--she was a pleasure every step of the way