Mortgage Process
Steps In The Mortgage Process For Purchasing Colorado Properties
There are several major distinct steps in the home purchase process, and many involve the mortgage. It may be complicated for both new and experienced home buyers. This article details important details on steps in the mortgage process for purchasing Colorado properties and covers what you should be aware of prior to initiating a property search.
Steps In The Mortgage Process For Purchasing Colorado Properties
Pre-approval
A pre-approval is an introductory review of your financial information and credit report to estimate what you may be able to obtain for a loan. It verifies that you have the preliminary criteria for a mortgage. Pre-approvals are not a guarantee that you will ultimately be able to obtain a mortgage, but is a natural first step in the mortgage process.
The Application
A formal application takes place typically after you have an accepted offer on a property. You may be asked to provide additional personal information. The details on the property are also reviewed by the loan underwriter. They will request a copy of the Purchase contract as well. Your contract will normally require that you submit an application before a specific deadline.
Mortgage Appraisal
An appraisal is ordered by the lender (although buyers are generally required to cover the expense) to calculate the exact market value of the property. Appraisers will analyze recent sales of similar homes and compare them to the one that you are purchasing. A specific dollar amount is generated. Essentially, the property value must satisfy the loan amount.
Commitment
After your personal facts and the details on the home are analyzed, the lender prepares a letter of commitment. This assures the parties that no significant problems exist and that the mortgage company is fairly sure that the loan will result in final approval. There may be outstanding conditions included in the letter such as an employment verification and final credit score pull. Therefore, it is critical not to make major purchases or change your financial condition even after a letter is issued as it may cause a fall thru.
Clear to Close
A clear to close is basically the ending approval of a mortgage. It verifies that all criteria have been satisfied and that the mortgage company can send the information to the closing party. This sometimes takes place merely days before the scheduled settlement date.
The Closing
The closing entails signing of paperwork and filing of information public registry. Be sure to bring proper I.D. and certified funds for any amount you are paying. Personal checks or cash are ordinarily not acceptable.
A Few Additional Tips
Deadlines are a critical factor of any real estate transaction, so make sure that you know the deadlines and what you must provide to meet each one. Working with a experienced mortgage professional and real estate professional will be a huge help. They can offer advice and assistance, stay on top of deadlines, and provide a less stressful experience. As a local real estate broker, I can offer assistance with the mortgage and overall home buying process. You may reach me, John Cutshall, at Fortuity Realty LLC via phone at 303-747-6748 or email at john@fortuityrealty.com.