There are many steps in the real estate buying process, and several relate to obtaining a mortgage loan. It can be complicated for both new and experienced home buyers. This blog outlines important details about steps in the financing process for purchasing Franklin TN homes and includes what you may want to be aware of prior to beginning the process.
Steps In The Financing Process For Purchasing Franklin TN Homes
A pre-approval is a preliminary analysis of your finances and credit report to estimate what you may be able to receive as a loan. It ensures that you meet the preliminary criteria for a loan. Pre-approvals are not a guarantee that you will ultimately be able to obtain financing, but is a natural first step in the process.
Applying for Financing
A formal application is submitted usually once you have an agreement to purchase a property. You may be required to furnish more financial paperwork and information. The details on the property are also provided to the mortgage company for review. They will request a copy of the Purchase contract as well. Your contract may specify that you submit an application within a specified period of time.
Performance of an Appraisal
An appraisal is needed by the lender (although buyers are generally responsible for the expense) to identify the current market value of the property. Appraisers will evaluate recent sales and compare them to the one that you are buying. A specific dollar value is generated. Ultimately, the value of the real estate must satisfy the amount that the lender is lending to you.
Commitment from the Lender
After your financial facts and the property details are reviewed, the lender issues a letter of commitment. This confirms that no significant issues have been identified and that the lender is fairly sure that the loan will receive a clear to close. There will be remaining conditions detailed in the letter such as an employment verification and additional credit check. It is therefore important not to make costly purchases or alter your financial situation even after a commitment letter is issued as it may cause a loan to fall thru.
Preparing to Close
A clear to close is usually the ending approval of a loan. It verifies that all requirements have been fulfilled and that the lender will release the information to the closing party. This sometimes takes place just days before the scheduled settlement date.
The settlement includes signing of paperwork and filing of documents at the Registry of Deeds. Always have proper I.D. and certified funds for any amount you are paying. Personal checks or cash are generally not acceptable.
Some Extra Advice
Deadlines are a critical factor of any real estate transaction, so make sure that you know the dates and what you must perform to comply with each condition. Working with an experienced mortgage consultant and real estate professional will be very important. They can provide you with advice and support, keep track of deadlines, and ensure a less stressful experience. As a local real estate agent, I will offer guidance on the steps in the financing process for purchasing Franklin TN homes. For more information, contact Jim Eaton at Blueprint Realty, Inc.
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