Home Financing – Getting that approvalBy Selwyn S. Jamurath
Spring is in the air!
Last month we went off course temporarily to discuss the new reality in the mortgage and real estate markets today. This month we’ll get back on topic and continue our January discussion about the preliminary title report, the appraisal and the conditional approval.
The next step, once you’ve received the conditional approval is to start providing all of the necessary documents to satisfy the list of conditions that are on the approval. Usually your loan professional will ask you for these documents. Sometimes those documents consist of things such as proof of citizenship, proof of bankruptcy discharge…etc. This occurs because the banks need to feel secure with your current or past financial situation. This minimizes the risk for the bank to loan you those few hundred thousand dollars comfortably.
Many banks are offering “no closing cost” loans as an enticement to get your business. Nothing is free! You’re being charged the closing cost in your loan (APR) and many times, you’re paying double or more for that convenience. Make sure to ask the proper questions and request proof in writing, before signing on the dotted line.
Now that we’ve presented proof of every aspect of our lives to the bank, what happens now? Well, your loan professional will begin to request your “Docs”. What are docs? Docs are the loan terms that you will be signing at your local title company. This includes the type of loan, tears, interest, APR, cost of the loan…etc. We use Old Republic Title, next door to our King City office. You may use whomever you, your Realtor, or loan professional chooses.
When your “Docs” are available at your title company, your loan professional and / or Escrow Agent will call you to setup an appointment to come in and sign your loan documents. This is where you will want to make sure that all of the terms that were discussed with you by your loan professional are on your loan. You’re going to want to look at closing costs, interest rate, pre payment penalty, Type of loan, points and any other items that would be important to you.
Once you’ve signed all of your “Docs”, you will have 3 days (for Refinance) to change your mind, if you’re not feeling comfortable with any of the terms of the loan. If you have made a purchase, then your loan becomes effective on the day it records at the county recorder’s office, which is after the bank funds your loan. You do not have the option to change your mind on a purchase, only on a refinance.
So…you’ve done it. Congratulations! Now you can feel more comfortable with the loan process because you’re a more educated consumer. Education is power and can save you a ton of money and headaches!
These days we have a lot of choices and the best way to learn about these choices is to ask your loan professional. My team of professionals and Real Estate partners can assist you and answer any questions that you have regarding home purchase, refinance or foreclosure. We are well versed in all aspects of these topics and best of all…we’re local.