Buying a Home - The process of delivery and assessment that leads to the Loan Approval

After getting pre-qualified or pre-approved for a home loan and made the house hunting and found a house, and has signed a sales contract, the hardest part for you is almost finished, at least for now!

Now, the creditor must go to work and do their research to get the package of loans approved and funded and ready for a date. In this article we will discuss the application process and also the evaluations, home inspections, lacerations subscription special that you can meet and what to do if you get denied for a loan.

You can help speed the process along to a quick closure to respond promptly to all requests from the lender, or requests for documents from you. Give a warning "heads up" to the human resources department to expect a verification form for employment or call from the lender. Stay in touch with the mortgage broker, lender and real estate agent - but not drive them crazy! These are professionals and have a vested interest in seeing your next loan - because if he does not earn a commission! So be sure to have your fingers on the pulse of your loan!

Rating affects your lender to verify the value of the property you want to buy. These reviews are an estimate of value performed by a Certified Real Estate appraiser (CREA), which is licensed by the State to do this. The expert will review your property inside and out. It will examine the records of sale for comparable nearby properties during the last 6 months ("comps"). Photographs will be taken and, finally, a full report will be prepared and transmitted to the lender. For a residential property, the cost of normal for this service is between $ 250 and $ 400. In some cases, the creditor may also want to have a surveyor inspect and certify the property boundaries.

Sometimes problems arise: What happens if the property rates for less than the price agreed to pay? Then, the seller must lower their price, or you will pay more money on account, as the creditor does not intend to give more than a certain percentage of the value.

Search in title / abstract and title insurance have been covered in previous articles by me, so here I will only briefly reiterate that the purpose of seeking the title of a property is to ensure that the lender is not going to lend money against a property that you may have prior encumbrances such as unpaid taxes, liens, zoning issues, lawsuits, etc. The company title search for the title deeds and certified free of problems and then issue a title insurance policy. Just remember that the insurance does not cover the title of future events, such as life or auto insurance. It covers past events!

Flood certification is always required to ensure the lender that the area is an area subject to flooding. Flooding is usually not covered by your insurance policy risk homeowners, so if you are in an area likely to be flooded, hurricane experience, etc., then you will be required to purchase flood insurance.

While an evaluation is certainly necessary, you should protect yourself by having a home inspection performed independently. Especially if you have no experience in the construction industry! Some lenders and were really needed that to happen. The inspector will appear in the foundation of the house and roof and systems such as plumbing, electricity, heating and air conditioning. If there are serious flaws, bring to the attention of the vendor as being in need of repair prior to sale, or negotiate the sale price to pay. Obtaining repair estimates in writing to strengthen your position when you discuss this with the seller. A Professional Home Inspector will probably pay from $ 200 to $ 400 or more homes for very large or complex.

After the assessment has been done you and the lender will have a definite idea of ​​the value of the property and now you can start shopping for homeowners / hazard insurance. You will be asked at the end to show that this coverage is purchased. Do not let this item in the hands of the lender for you to do, because the costs of the policy can vary greatly. Shop around and be sure to ask for discounts for alarm systems, deadbolts, window shutters, hurricane impact glass windows, etc. I have a separate article to buy homeowners insurance so I do not cover this extensively here, except to say that you can usually choose a "replacement value" policy for old houses full of furniture, appliances, electronics, etc., or choose "Cash Value" policy, which represents the amortization of content over time. An old computer may be visa does not have any residual value and not be replaced, for example. Cash value policies are cheaper.

Unforeseen problems: as subscribers of the service provider to process your loan, things can get. Condominiums, for example, can be a problem. In purchasing a condominium is buying only the interior space. The exterior of the building belongs to the association as a whole. With a house you can have the garage space and a small forehead and / or rear yard seated area, which is your private property. The value of this space you have can be influenced by what is happening in the building as a whole. The lender will usually have you take a questionnaire to fill out the condo association. They will not wish, for example, to see that more than half of the units are rented than being owned. Renters tend not to take care of their units, and thus reduce property values ​​for everyone else. Lenders also want the assurance that the management of the association is responsible, has an adequate budget for maintenance, port adequate insurance coverage, etc. What is a storm blowing off the roof or 2 units of fire surrounding your unit?

I live in South Florida. This is a great retirement community. Many condos and many of their management teams are run by volunteers who are retired and elderly. Some are great. And some can make your life hell, they are curious, nosy obnoxious! Check the overall population of the condo you are considering buying and see if you are a "good fit" for the residents there.

Now let's look at the worst case scenario - your loan is denied. It happens. Maybe your credit is less than perfect, your lender may not like the property or would like to see more down payment than you can afford. The most common reasons are the problems of credit, or not enough money or too down current debt. In any case, the lender must provide you with written reasons within 30 days. If you think that there was discrimination involved, call the toll the creditor must provide. If not, keep shopping for a loan elsewhere. If you work with a mortgage broker who will probably already have your application delivered to a new lender before you even hear the turn-down, because it is in their interest to see you get approved.

Maybe we really need to wait a bit 'down and pay some debt and save some more money'. The lender may have just done a big favor, do not get to get in over your head.

As always, work with a mortgage professional can answer your many questions and guide you to the right lender for the loan right for you .......