How you will purchase your home should be the first question on your mind before finding that perfect place. Financing your purchase through a mortgage company can seem like a daunting task, but, the Salas Team is knowledgeable in this arena and can walk you through the process. The following steps may be required if you decide to finance your home purchase:
1. Financial pre-qualification or pre-approval. The first question a realtor or seller might ask a home buyer is, “are you pre-qualified or pre-approved?” Basically, a mortgage company makes an initial determination based on facts that they receive from a buyer through an application and interview process as to whether the individual buyer may be qualified to obtain a loan. While a pre-qualification or a pre-approval from a bank does not guarantee you a loan, it is a good first step for a buyer to analyze his/her own financial situation and budget to best determine the potential price range for which he/she may qualify in the purchase process. During this process, a buyer provides pertinent documentation, including verification of employment, credit report and financial history to the bank in exchange for a letter from the bank indicating their determination as to whether the buyer will “qualify” for a loan.
2. Application and Underwriting Process. As soon as the buyer identifies the property they wish to purchase and secures a signed Agreement of Sale, the buyer shall apply for the loan. During the application process, the bank will request financial historical documents, statements of income, and other pertinent documents in order to make a final decision as to the buyers creditworthiness. In addition, the bank will appraise the property to determine its value. The loan package is then submitted to an underwriter for final approval.
3. Loan approval. If you are approved for the loan, all parties are notified and loan documents are typically sent to the title company to complete at closing.
4. Title company. The title company’s role in the closing process is an important one. Not only will the title company exam and provide insurance for the title research and survey they conduct on the property, but the title company often acts as a liaison between the bank, buyer and seller. The title company will schedule the closing with all parties and facilitate the exchange of payment and payoff.
We recommend our 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. We can provide resources to help you find the right Lender and Title Company to walk you through the home purchase process.