Whether you are buying a home or refinancing, these essentials will help ensure the best possible results.
START WITH REPUTABLE LENDERS .
New laws and regulations haven’t eliminated predatory lenders and scams, so do be cautious. Ask friends and your agent for a few recommendations and then do your own research.
SHOP AROUND.
Once you’ve identified several good lenders, you should be able to get their rates and fees over the phone or from their websites. After a five-minute phone conversation, a quality lender will tell you how much you’re qualified for. Be sure to ask if they guarantee closing costs and closing dates; reputable lenders usually will do so, even in this heated market.
GATHER DOCUMENTATION.
Be ready to provide your W-2 forms for the last two years – or two years of tax returns if you are self-employed. You’ll also need your two most recent pay stubs and your two most recent bank statements, plus your most recent savings and investment statements. The lender will run a credit check and verify that you are currently employed and other needed information to proceed.
GET PRE-APPOVED.
Reputable lenders should be able to get you PRE-APPROVED (different and more important than pre-qualified) for your loan amount within 24 hours of receiving your documentation, and that preapproval is typically good for 120 days. Pre-approval is much more detailed and precise than a pre-qualified statement. In a hot market like the one we are currently in, sellers will almost always insist on a PRE-APPROVAL letter to make sure you are actually able to get a loan for what is agreed upon in the Purchase and Sale contract.
BE VIGILANT.
Stay on top of the process to ensure your lender is meeting agreed-upon deadlines (as your agent, I always make it part of my business to also keep lender/inspector/etc on task with deadlines). For example, laws require (including addendums to P&S contracts) to require lenders to provide appraisals, and this change has slowed the process of less qualified lenders who haven’t developed successful business relationships (or employ) appraisers for quick turn around. Since your loan can’t close until the appraisal is complete, it pays to be assertive.
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