Atlanta Buckhead Midtown -
Mortgage Important Part of Due Diligence
In Atlanta, in Buckhead, Midtown or anywhere else in the Metro Atlanta area, Mortgage Readiness is an important part of Due Diligence. Pay attention to the period of time delineated in your Purchase and Sale Agreement.
Mortgage Readiness - the FOUNDATION of Purchase process.
Just as the photograph above demonstrates how important a FOUNDATION is when building a home, Mortgage Readiness is the FINANCIAL FOUNDATION.
You wouldn't build the frame for a home before completing the FOUNDATION.
Likewise, you cannot be successful with a Home Purchase unless you have your Financial Foundation in place. Even if paying Cash, one needs a clear Foundation documenting the sources of the money and details of the liquidity of the funds.
Yes, one needs the actual address of the property to be purchased to reach the final stages of the Mortgage process. The final set of verifications occur during the Due Diligence period of the Purchase and Sale Agreement.
Before that, when the Property Search begins, the basic MORTGAGE FOUNDATION must be prepared. Knowing one's financial situation seems so fundamental to professionals that it is almost hard to write this post!
NO - THESE THOUGHTS DON'T WORK OUT WELL!!!
"Oh, when I find what I want, I'll apply for a Mortgage."
"I got a letter online for Mortgage from a discount no-name brokerage."
"I am sure my Credit Score is excellent - I won't have any problems."
"I can borrow my down-payment from friends."
"I can get a Mortgage without paying off bad debts."
Let's review one at a time...
"Oh, when I find what I want, I'll apply for a Mortgage."
Put yourself in the Sellers' shoes. You have four offers. One is close to full price and has a Mortgage Letter as part of the Offer. One is for Cash at a little below the first Offer but they want to wait three months to Close the sale. One offers a very low price and wants the Seller to finance. The last Offer is for full price and states they will apply for a Mortgage when the Offer is accepted. Which one would you as the Seller accept?
"I got a letter online for Mortgage from a discount no-name brokerage."
What is the purpose of that? It is usually an offer of a substantially lower Interest Rate and doesn't include all the EXTRA charges to get that loan. The small print on the letter will state that it isn't really an offer of a loan - just a response to the data provided and NOT sufficient for a complete offer of money.
"I am sure my Credit Score is excellent - I won't have any problems."
Except the forgotten shared phone bill from 2011 that never got paid off or that ...
For an Agent to spend time on a prospective Buyer's search, the Agent needs to know that the person is capable of a purchase. Interest Rates are influenced by Credit Scores.
"Many lenders use the Fair Isaac Corporation (FICO) model for credit scores, which grades consumers on a 300- to 850-point range, with a higher score indicating less risk to the lender. Generally, a score of 800 or higher is considered exceptional; 740 to 799 is very good; 670 to 739 is good; 580 to 669 is fair; and 579 or lower is poor."
"I can borrow my Down-Payment from friends."
Actually, no, you may not borrow from anyone for your Down-Payment. You may receive gift money from a restricted group of people, mostly direct relatives, but you cannot borrow and then get a Mortgage.
(Of course, there may be arcane ways to get around this but let's stick to mainstream options.)
"I can get a Mortgage without paying off bad debts."
In fact, this may be possible but at what Interest Rate? However, at a certain point, your loan would be considered a 'hard money' loan. Not a great move financially...
DO IT RIGHT -
- Buyer submits basic Mortgage Application
- Buyer Credit Score is high enough to qualify for a good Interest Rate
- Buyer Purchase Range is sufficient for what the Buyer wants to purchase
- Buyer sends Mortgage Letter to Agent showing homes
ACHIEVE SUCCESS!
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