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Mortgage MUSTS!

After talking with a lender, obtaining a home loan may seem like an easy process. But, no matter how they spin it, there are 5 hoops that you MUST jump through…

1. Get Pre-Approved: You can either get approved prior to searching for a home or after you find one, but in a highly competitive housing market, it’s akin to self-sabotage to not get pre-approved before making an offer; DO NOT confuse this with pre-qualification. Pre-Approval is where your lender gathers all your tax and financial information, sends it to an underwriter and literally gets you approved for a loan; meaning the lender will now agree to give you the money. Pre-Qualification is a short process the lender goes through to see if you are a good candidate (i.e. pull credit, review application); the ability to loan you the money is still contingent on the approval process.

2. Pass the Home Appraisal: Lenders will always require a Home Appraisal and that appraised value must be at least (if not more then) the offered amount. If the value is at or more than you offered, then the lender will accept it “at value”. But, if the appraisal comes in low then there are three options: 1, the Seller reduces the price to meet the appraisal. 2, You (the Buyer) come in with more cash to make up the difference. 3, you back out of the offer under the appraisal contingency and take your deposit back.

3. Keep Your Credit Stable: Your credit score must remain stable throughout the home-buying process. Meaning NO large purchases. NO new cars or furniture for the house. It won’t kill you to be patient for a couple weeks until the lending underwriter pulls your credit prior to funding the loan.

4. Review the Closing Disclosure Form: As of 2016, the Closing Disclosure form or CD has become a legal must. Lenders are now required to provide it to you AT LEAST 3 days prior to closing, which means if they do not provide it OR you do not acknowledge that they provided it, that the loan will NOT close and you will not get your keys on time. So, when your lender sends you the CD, simply make sure you open it and acknowledge receipt; this starts the 3-day ticker. You then should review the document and call your lender to go over it with you.

5. Pass the Underwriting Process: Before the lender can give you the money, your must pass the final underwriting hurdle, where they will go through the appraisal to see if there are any conditions added from the appraiser (this is big with VA loans), call your employer to verify you still work there and pull your credit to confirm that you did NOT purchase a new car. (these are just a few of the things they will verify).