One of the first steps for buying a home is to get preapproved for a loan.
Why is loan pre approval important?
The first step in the process is to get pre approved. Loan pre approval is important because the Triangle Real Estate market is competitive and a home seller won’t even consider an offer if you haven’t been pre approved. Most Seller agents want a local company to provide the approval so they can be sure a loan originator with experience in new or resale homes has actually looked at the loan application. Many banks and mortgage brokers specialize in refinance loans so it’s important to make sure your mortgage broker knows what they are doing with new sales to make sure there aren’t problems down the road.
Buying a home can be a lot of work and the goal is to get to settlement and closing with the least stress and the least money.
What information should be in the preapproval letter?
Many pre approval letters say that your credit has been checked and is subject to verification of information you gave them. Many banks write letters like that and do not have a process in place to do more until loan application. The pre approval letter from Carolina Ventures is a solid letter that will help you get the house in a competitive bidding situation. This is what the sellers agent will like to see from your pre approval letter:
A Pre-approval with Carolina Ventures includes:Carolina Ventures Mortgage Company
Review of tri-merge credit report
Review of income documentation (Salaried—paychecks/W-2, Self-employed—Fed. tax returns)
Confirmation of 2 year work history in same field
Debt to income calculation
A clear to close will be provided once underwriting reviews appraisal and title work.
Can you see how a letter this detailed will help your buying position?
Whitney Bulbrook, President, Carolina Ventures Mortgage is my go to Mortgage loan Broker. I don’t have any financial relationship with her, I recommend her because she has been so helpful to my clients and really pays attention to details to help my clients get the best loan with the best rates, always on time.
Videos with Whitney
What are mortgage loan conditions?
“Loan conditions are basically just a checklist of items we need in order to obtain that finalized approval on your loan. So for example, when we submit a loan for underwriting, we are expecting that the conditions would be an appraisal, homeowners insurance, and title work from the closing attorney.”
Do I need 20% down to buy a house?
“You do not need 20% down payment to buy a house. You need 3% down if you’re a first-time home buyer, and 5% down if you’re not a first-time home buyer. A lot of people think they need 20% down because that’s the threshold where you remove mortgage insurance. So mortgage insurance is required any time you have less than 20% down. In years past, it was quite expensive, so I think that’s where the idea of 20% came from. But now mortgage insurance is much cheaper because it’s based on credit score, so it’s a fraction of what it was in years past. So really, you need 3% down if you’re a first-time buyer, 5% down if you’re not a first-time buyer, and then we can price out the different in my options for you.”
Why should you negotiate Seller Paid Closing Costs?
“Seller paid closing costs are going to reduce your cash to close.” You always have to bring your down payment. The seller can never pay for your down payment, but they can assist with closing costs. That is done in the contract. So during your negotiation, either up front or maybe during your due diligence, you might ask the seller to pay for closing costs. It can cover any and all normal and customary fees for your mortgage loan, which would be things like appraisals, title insurance, your attorney fees, home inspection, anything that’s sort of in the realm of normal closing fees.”
That Online Credit Score May Not Be Your ACTUAL Credit Score!
“Online they use the Vantage scoring model. And while it’s helpful because it’ll let you know, is there any unauthorized activity going on on my credit or is there a late payment? They use a different algorithm, they use the Vantage algorithm. No, it can be as much as 100 points off. Right. But use it as a tool to be like, “Okay, is there anything that shouldn’t be going on with my credit? Am I making my payments on time?”
What if I quit my job when applying for a mortgage loan?
“No, no, no, nothing’s gonna stop you from buying the house unless you quit your job. Don’t do that. I will say, if you did quit your job I would know because a couple of days before the closing the lender actually calls the HR department and they do… Yeah. So they do what’s called a verbal verification of employment to confirm you’re still employed because that actually used to happen a few years ago. So people would get loan approval, and then they’d quit their job. So yeah, don’t do that. That’s not a good plan.”