Why Choose Pre-Approval?
It’s advisable to go straight to a pre-approval for several reasons. A pre-approval can strengthen your purchasing power: as a far more accurate evaluation of how much house or real estate you are capable of buying, it will be more appealing and thus perform better than a pre-qualification in a competitive sellers’ market. It’s also more time-effective since it reduces the time your lender will need to process and fund your loan.
Lenders and Brokers: telling the difference
The lender or creditor is the party who 1) disburses or provides funds to the borrower at the end of a successful loan application process, and 2) receives the note attesting the borrower’s obligation to repay. The broker, meanwhile, acts as an intermediary between the borrower and the lender and serves as the applicant’s main contact throughout the process. The mortgage broker usually receives a service fee from the lender for customer services rendered.
Loan application forms
Your loan officer will supply you with a loan application to complete and will furnish you with a list of documents needed in order to substantiate the application. Fill out all forms accurately and contact your loan officer for any questions or clarifications.
Underwriting: keeping in touch
Underwriters, hired by lenders, are analysts who examine all the data from a borrower’s property and transaction, and ultimately determine whether or not mortgages should be issued to the applicant. Loan approval committees will use underwriters’ reports during their deliberations to evaluate the property and the applicants’ creditworthiness. Your broker may contact you frequently in the course of this process, so prompt communication is necessary to keep the process running smoothly.
Here comes the best part. Once your lender has agreed to close or fund your loan, the final signing takes place. Before this happens, however, be sure to verify and finalize all the documents, and to supply any additional requirements (such as photo IDs or cashiers’ checks). The final loan documents are usually signed in the presence of an escrow officer or a notary.
Your payment is either automatically deducted or wired—-in the latter case, the money is electronically transferred between financial companies. Make sure that the wiring instructions as well as all important numbers must be clarified and checked for accuracy by both parties.
Give yourself a pat on the back. Your loan is now funded! Tie up any loose ends by confirming the money transfer with your broker and filing all pertinent documents of the transaction.