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A pre-approval letter is a powerful tool in your search for a new
home. It shows the sellers that you're serious. Many buyers find that
they have increased negotiating clout if they are pre-approved before
they conduct their home search. Plus, if you're pre-qualified, it's a
snap to apply for full approval once you've found your dream home - or
want to begin building one.
While a pre-qualification is an estimate of what you can afford based on the
information you provided, a pre-approval indicates that a lender has taken a
detailed look into your financial background and examined your credit. In
addition, a pre-approval means the lender has committed to lending you a
specific amount of money, pending certain property details.
The advantages of securing a pre-approval, rather than waiting to apply for
a loan once you have found a home, include being able to shop for a home
knowing exactly what you can afford and finding out about possible
qualification problems early in the home buying process. You are also able
to present a much more solid offer to sellers, because it includes a
guarantee that you can afford the home.
To secure a pre-approval, contact Home123 and one of our Home123 Mortgage
Consultants will work with you to gather and submit your financial
information. We will then review your documentation and your credit report.
Once you qualify, we will provide you with a written pre-approval for a loan
up to a certain loan amount, down payment and interest rate, subject to the
terms of the pre-approval letter. Once you have found a home and are ready
to make an offer, your pre-approval letter from Home123 will assure the
seller you are a qualified buyer, and will be able afford the home of your
dreams.
How to Begin
To begin the process call 1-866-774-5172. A friendly and
knowledgeable Mortgage Consultant will be there to answer all of your
questions.
To apply for pre-approval, you'll need the following information:
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Names, current addresses, and Social
Security Numbers for all borrowers
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Previous addresses for the last two
years
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Pay stubs for the last two years
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Two cycle's worth of bank statements
for all assets
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W-2 forms for the last two years
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Tax forms for the last two years
We'll review your application, documentation and check your credit report.
After we've determined that you're able to repay the loan, and subject to a
full underwriting review, your Mortgage Consultant will send you a letter of
pre-approval. At Home123, we make the home loan process easy.
Closing Your Loan
The closing (or settlement) is the actual transfer of ownership from the
seller to the buyer. At the closing, you will sign the paperwork, pay the
final closing costs and finally take ownership of your new home. Your
Mortgage Consultant will work with you to schedule a closing date, which is
indicated on your purchase agreement. Although the closing process varies by
state, many activities are standard. Click here to learn about what
closing costs you might expect and
things to consider
before closing. For the closing costs, you'll need to obtain a certified
or cashier's check, as the title or escrow company does not usually accept
personal checks.
What Happens at Closing
Closing costs and practices vary depending where you live, the type of
property you're buying (house, condo or co-op) and individual circumstances.
In some states, a neutral third party, usually an escrow company that is
mutually chosen by the buyer and seller, transacts the entire closing
process. In others, title companies customarily oversee the process. In the
remainder, attorneys are engaged. Your Mortgage Consultant can tell you what
to expect.
The closing, typically held at a title and trust company, is the final
hurdle to calling the house your home. In many cases, all parties involved
will attend, including you, the seller, the real estate agents, the lawyers,
the lender and any other interested parties.
The steps below explain what usually happens during and after closing:
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The closing agent reviews the
settlement sheet with you. Both you and the seller sign the settlement
sheet.
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Signatures are collected for loan
documents, such as the mortgage or deed, note and Truth-in-Lending
statement. Evidence of the required insurance and inspections is
presented.
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If everyone agrees that the papers are
in order, you submit a certified or cashier's check to cover your down
payment and closing costs. (Or, in some proceedings, it is drawn from an
escrow account established for your home purchase.)
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The lender provides check funds
covering the home loan amount to the closing agent.
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If your monthly payments are to
include property taxes and insurance, a new escrow account ("impound" or
reserve) is established.
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You receive the keys to your new home!
Key Closing Documents You'll Receive
HUD-1 Settlement Sheet
This itemizes the services provided and the charges to the buyer and the
seller. You should be allowed to review this form shortly before your
closing meeting so you know your closing costs in advance.
Truth-in-Lending (TIL)
Disclosure You should be mailed your initial TIL disclosure within three
business days of applying for a home loan. It outlines the costs of your
loan and discloses the annual percentage rate (APR) and other terms of the
loan, including the finance charge, the amount financed, the payment amount
and the total payments required. Since it's possible that the APR calculated
at the time of your loan application will change a little before closing,
your lender is required to give you the final version of your TIL disclosure
at or prior to the closing meeting.
Deed of Trust or Mortgage (also known as the Security Instrument)
This document conveys a lien in your property as security for repayment of
your home loan. (This means that if you default on your loan, your lender
has the right to foreclose your ownership interest and take possession of
the property).
The Note
The mortgage (or promissory) note represents your promise to pay the lender
according to the agreed terms. It includes the dates on which your home loan
payments must be made and the location to which the payments must be sent.
We want your mortgage process to be as stress-free as possible. By following
this checklist, it will guide you in your preparations. Use it in
combination with the background information on this site. Give us a call at
1-866-774-5172 with all your questions, and with the guidance your Mortgage
Consultant provides, you should feel knowledgeable and comfortable.
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In many states, it is necessary to
obtain a lawyer. Also, if you have not already done so, choose a notary
(this is sometimes prearranged by the title company, so it's good to ask
in advance). Arrange for the signed purchase offer to be delivered to
him or her as soon as possible. Review the fees and disbursements,
anticipated adjustments, property transfer tax, mortgage deductions and
other closing costs. Talk to your real estate agent or attorney about
how you plan to be registered on title.
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Satisfy any outstanding conditions,
such as financing or a home inspection, within the time frame set by the
offer. Be sure you fully understand how to keep the contract alive, and
how to cancel it if the conditions can't be satisfied.
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Once your mortgage application has
been approved, have the mortgage commitment sent to your agent and/or
attorney.
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Any tenants must either cancel their
leases or sublease their current premises, if permitted. How much prior
written notice is needed will vary, so check it out with your landlord
and/or attorney.
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Arrange insurance coverage to take
effect on closing. Be sure the insurance agent provides your agent
and/or attorney with written confirmation before closing, showing the
name of the insuring company, the amount of coverage, its expiration
date and the name of any lenders in the loss payable clause. Coverage
should be for the full insurable value of the building only (not the
land), on a replacement cost basis.
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Normally it will be you (or your
lawyer) who contacts the water, electric and gas utilities to have the
meters read on closing, new accounts set up in your name and final bills
sent to the seller. Many buyers do a "double-check" a few days before
closing, just to be sure. Contacting the telephone and cable TV
companies is also your responsibility.
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Plan to meet your agent and/or
attorney a day or two before closing to review and sign all closing
documents. Don't wait for the actual closing date, when so many other
things must be done. At that time you should deliver the money needed
for closing, in certified funds, payable to your escrow company or
attorney in trust. Be sure to get information about any payments due
right after closing - the mortgage, property taxes or condominium
maintenance.
Call
1-866-774-5172
to speak with an Expert Mortgage Consultant or apply
now
with our
Rapid Requestsm
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