There are several major steps in the real estate purchase process, and several involve obtaining a mortgage. It can be confusing for both new and repeat home buyers. This article outlines important information about the mortgage process for purchasing Washington real estate and covers what you may want to be aware of prior to initiating the process.
A pre-approval is a preliminary review of your financial information and credit history to determine what you may be able to obtain for a loan amount. It ensures that you have the primary requirements for a mortgage. Pre-approvals do not certify that you will ultimately receive a mortgage, but is a typical initial step in the process.
A formal application occurs normally once you have an agreement to purchase a property. You may be asked to furnish more financial information. The specifics on the property are also evaluated by the mortgage company. They will request a copy of the Purchase and Sales contract as well. Your contract will usually specify that you submit an application before a specific date.
An appraisal is mandated by the lender (although you are always required to cover the cost) to calculate the exact market value of the real estate. Appraisers will compare your home with others that recently sold in the area within a limited time frame. An exact dollar amount is noted. Essentially, the value of the property must satisfy the mortgage amount.
After your personal information and the details on the home are reviewed, the lender prepares a letter of commitment. This confirms that no significant issues exist and that the mortgage company is somewhat certain that the mortgage will close. There will be outstanding conditions detailed in the commitment such as an employment verification and final credit check. It is therefore essential not to complete costly purchases or alter your financial situation even after a commitment is provided as it may keep the mortgage from closing.
A clear to close is basically the final approval for financing. It indicates that all criteria have been satisfied and that the lender can release the file to the closing agent. This may take place just days prior to the planned closing.
The closing includes signing of paperwork and filing of documents at the Registry of Deeds. Always have legal identification and certified funds for any funds you are paying. Personal checks or cash are traditionally not acceptable.
Deadlines are a critical factor of any real estate transaction, so make sure that you know the dates and what you must perform to meet each one. Receiving representation from a experienced mortgage professional and real estate professional will be very important. They will provide you with advice and support, keep track of deadlines, and make it a less stressful experience. As a local real estate agent, I can offer assistance with the mortgage and overall home buying process. You may reach me, Blaine Bickelhaupt, at Blue Mountain Realtors via phone at (509) 382-2020 or email at email@example.com.