The mortgage process can be a bit confusing leading up to the closing table. Especially when this is your first time buying a home, you may rely heavily on your Realtor to help you along the way.
Here are some insights and tips into the mortgage process leading up to closing.
When you first apply for a loan to purchase a home, you receive a pre-approval letter. This document tells your Realtor, you are serious and this is the amount of money you can qualify for.
Afterwards, you can tour homes to see which ones you like. After choosing a home and sending in your offer, you are able to start the transaction process.
Starting that process means that you will need to contact your lender to ensure they can qualify you for a home loan of that specific amount. However, what most people do not know, is this number is often bigger than what it needs to be.
Overshooting the initial loan amount
Having an initial mortgage loan amount that is more than what you are expected to need is a good thing. During the transaction, numbers can change and lenders are aware of this. Therefore, with the extra playroom, your lender may reach out to with updates on the loan amount.
This saves massive headaches in case the initial loan amount was underestimated. …Imagine getting to the loan table and finding out you do not have enough money! Not to mention there are requirements for lenders to ensure they overestimate the initial loan amount.
A Few Days prior to Closing
As the closing day approaches your loan amount estimate changes. You should have had a home inspection, appraiser, and possible other inspections that adjusted the total cost of the transaction.
Three days prior to closing day, however, you will receive a document named “Closing Disclosure” which shows the final numbers of the transaction. Often times, the lender is still adjusting the final figure with the title company.
Therefore, it is imperative you remain flexible and understanding that the title company or lender will, in most cases, contact you with final figures. Be prepared that it may even be the day before closing.
At this time, you should ensure all money is in place for closing day.
Your lender or the title company should provide you with wiring instructions for the funds you are contributing. It is HIGHLY recommended you complete this task before the day of closing so there are no delays the following day.
In some cases, transactions can be delayed if wired funds are taking longer than expected since a buyer might have not done this as soon as possible.
Scams and Fraud
It is important to note that there are many scams during this wire transfer process. Some fraudulent persons may give you false information to wire funds to a different account.
Therefore, as a buyer, you should always verbally confirm the wiring instructions with the title company or lender.
Completing the Transaction
As a home buyer, you should remain in contact with your lender, Realtor, and the title company so you know items are completed in a timely fashion.
Staying informed and diligently/accurately completing information goes a long way into the transaction process.
Once funds are wired, your job is done and if there are no more delays, you can expect to receive your keys on the day of closing!
Did you enjoy this blog or have a question? Comment below!
Also, big shout-out to a top-producing agent, Crystal Brady for helping with this blog!