20 Easy Steps to Home Ownership (Part 3/4)
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20 Easy Steps to Home Ownership (Part 1/4) A guide to buy a home and the process step by step
11) Approval
When you credit and debt to income is good your loan will be approved with little or no problem. However, in some cases you may need to put more money down to improve the debt to income ratio. If the property appraisal is less than the purchase price, you may increase the down payment to cover the difference or cancel the commitment before or on the appraisal deadline. In some cases repairs or improvements may be required. There may be also other conditions to meet before it is issued the loan approval.
Remember: if loan approval is granted to the mortgage broker, then this step is completed and the loan processor can work on steps 12,13 & 14, loan processor can proceed to get you a schedule for the appraisal and the home inspection,
To pay for the home inspection and the appraisal is your responsibility by default unless it is agreed with different terms in the contract.
It is not a good idea to get ahead whether step number 11 is not approved. This PROTECTS you not to spend in the appraisal and home inspection without knowing that it will be approved. Approved does not mean that it is Clear To Close, approved means that you are under some conditions set by the lender's underwriter.
12) Home Owners Insurance or Hazard Insurance
Lenders require for your protection to have evidence of insurance for hazards that can occur in your real estate property, so it will protect your home for any hazards, loan processor can help you with this step, also you can shop around with insurance brokers or insurance companies to get the best quote available. Remember: Home Owners Insurance will protect you and will protect lender.
13) Appraisal
Lenders require an appraisal, on all home sales, appraisal it used to compare other similar homes in the neighborhood with the one that YOU (buyer/borrower) you are buying. An appraiser usually will compare homes from the same style and type, Real Estate Properties must be compared mainly in the same subdivision and comparables must be no longer than six months old, when there are not enough sold homes in the same subdivision, then appraisers look further 12 months old sold dates or jump to other subdivision to get similar comps. Remember: You and the lender will be protected and will have a professional opinion from a licensed appraiser, you can know also whether the real estate that you want to buy is priced at a fair market value.
14) Home Inspection
Most purchase loans require an inspection of property for hazards and water damage. Conditions must be normal for living, if something essential to live is missing, seller must fix it or put it before sale. Remember: Property inspection protects specially the buyer and the lender.
15) Final Lender's Underwriter Review and Clear to close
When lender's underwriter review everything and conditions were met, then lender will send to the mortgage broker a notice by fax or email that your mortgage loan is ready to close. "Clear to close" Aurora Denver Colorado Real Estate - Homes for sale in Colorado Spanish Speaking Real Estate Agent
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