At one time or another we have all put together a puzzle. The pieces are all part of one final product but each piece has its important place and the puzzle is incomplete without all of the pieces being there. The same is true when it comes time to buy or sell real estate, and if a mortgage is involved the mortgage process is an equal part of that transaction. So look at the entire process of buying or selling real estate as you would one of those puzzles of the dog's playing cards and smoking cigars.
The first part of the puzzle, in my opinion, is for the buyer to meet with a mortgage professional. This meeting is for two reasons, one, to determine how much of a mortgage you can obtain, and two, to get a pre-approval letter.
The mortgage professional's, such as myself, job is to do a history and physical of your finances. We want to know your income and all of your debt. We want to know if you are single, married, divorced, how many dependents you have and how much you have in all of your bank and retirement accounts. Basically we want to know every item on your personal financial situation, no matter how big or small. Knowing all this information will allow us to determine if problems will occur and which mortgage programs will be available to the buyers. And, of course, how large of a mortgage we believe the buyer can obtain form the investors.
The pre-qualification letter is to place with the offer to buy the real estate. This letter will show the current property owner that the buyers have taken the time to be good buyers and that they are serious. It is also a way to have a hand up on other potential buyers who may have not gone the extras step being pre-qualified. Place yourself in the seat of the seller. If one buyer is pre-qualified and the other is not, all other items being equal, who would you consider has made a better offer?
The next step is to go out and look for real estate with your real estate agent. By knowing your buying power you can now focus on those properties in your price range. This particular piece of the puzzle is the one most public and the one most people know best. Find a home in your price range, make an offer and hope it is accepted.
After the negotiations are complete and the final price determined, the next numerous pieces of the puzzle start. The mortgage professional compiles current financial documents from the buyer, the appraiser appraises the property, the title company does their work reviewing the history of ownership and the inspector inspects the property. Once the title insurance is issued and the appraiser completes their evaluation of the property, all of these documents are put in one file and sent on to a mortgage lenders underwriter for review.
The underwriting piece of the puzzle is one that can take a few days to a few weeks. The underwriter may determine that more information is needed to make a final decision. They may determine that they need nothing and just approve the application or in rare instances reject the file due to one or more of many reasons.
Like all puzzles it takes shape one piece at a time. Some puzzles finish quickly, some take more time, and unfortunately some never get finished.
So please take my advice and plan well in advance. Nothing is more frustrating that to be forced into making uninformed decisions or not having time to get the puzzle complete.
The first part of the puzzle, in my opinion, is for the buyer to meet with a mortgage professional. This meeting is for two reasons, one, to determine how much of a mortgage you can obtain, and two, to get a pre-approval letter.
The mortgage professional's, such as myself, job is to do a history and physical of your finances. We want to know your income and all of your debt. We want to know if you are single, married, divorced, how many dependents you have and how much you have in all of your bank and retirement accounts. Basically we want to know every item on your personal financial situation, no matter how big or small. Knowing all this information will allow us to determine if problems will occur and which mortgage programs will be available to the buyers. And, of course, how large of a mortgage we believe the buyer can obtain form the investors.
The pre-qualification letter is to place with the offer to buy the real estate. This letter will show the current property owner that the buyers have taken the time to be good buyers and that they are serious. It is also a way to have a hand up on other potential buyers who may have not gone the extras step being pre-qualified. Place yourself in the seat of the seller. If one buyer is pre-qualified and the other is not, all other items being equal, who would you consider has made a better offer?
The next step is to go out and look for real estate with your real estate agent. By knowing your buying power you can now focus on those properties in your price range. This particular piece of the puzzle is the one most public and the one most people know best. Find a home in your price range, make an offer and hope it is accepted.
After the negotiations are complete and the final price determined, the next numerous pieces of the puzzle start. The mortgage professional compiles current financial documents from the buyer, the appraiser appraises the property, the title company does their work reviewing the history of ownership and the inspector inspects the property. Once the title insurance is issued and the appraiser completes their evaluation of the property, all of these documents are put in one file and sent on to a mortgage lenders underwriter for review.
The underwriting piece of the puzzle is one that can take a few days to a few weeks. The underwriter may determine that more information is needed to make a final decision. They may determine that they need nothing and just approve the application or in rare instances reject the file due to one or more of many reasons.
Like all puzzles it takes shape one piece at a time. Some puzzles finish quickly, some take more time, and unfortunately some never get finished.
So please take my advice and plan well in advance. Nothing is more frustrating that to be forced into making uninformed decisions or not having time to get the puzzle complete.
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