Mortgage Financing Guide

What to Expect

Buying a home is one of the most exciting milestones of your life. To prepare yourself for this moment, you need to know what to expect during the process. The best place to start is contacting a realtor. But, even as realtors, we are comfortable saying the most important step to purchasing a home is getting pre-approval for a mortgage and finding the right lender (preferably a mortgage broker). Mortgage financing is unequivocally the BIGGEST obstacle, whether directly or indirectly, most clients face in buying a home. For many who think they can't buy a home, it is usually related to procuring mortgage. We are here, along with our lending partners, to walk you through that process and give the best opportunity to purchase a home, and at the right price. 

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Step 1: Find a Good Mortgage Broker and Get Pre-approved

We strongly encourage every client to get a mortgage pre-approval. In most instances, we do not show homes until they do. Pre-approval will do 3 things. A mortgage pre-approval will first determine if you qualify for a mortgage. Second, it will determine what programs you are eligble for. Lastly, it determines your maximum loan amount. Great mortgage bankers and brokers will collect your loan documentation upfront to support your income, assets, and employment to ensure you have a rock-solid pre-approval for what you can purchase. Once you fill out a mortgage application and turn in your documents, you can be pre-approved in 24 hours. For motivated buyers, the whole process can take 2-3 days. Also, the amount of programs and lenders available to buyers are bountiful and most simply don't know they are out there. This is the value of a good mortgage broker. The right program can be the difference in buying a home now, or having to wait 3 years... Buying a home with a budget of $500k instead of $425K, and so forth.

If you do not have a mortgage professional in mind, we have a unique set of lending partners that have been incredible for our buyers. We will put you in contact with them and we'll all go from there!

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Step 2: Decide on the Right Budget

This is important. Always create your own household budget based on your income and expenses—not on how much the mortgage company will give you. In many cases, a mortgage company will pre-approve you for more than you’re comfortable spending. This is why you need to determine the monthly payment you feel comfortable with after talking to a lender. This likely includes doing a full household budget and taking into consideration what changes other than a mortgage payment will occur once you move into your new home. If you’ve lived in an apartment or with roommates, you may overlook new expenses like garbage, water, or HOA fees that could easily blow your budget.

On the other side- just because you think you can afford a certain payment every month doesn’t mean the mortgage company will agree. Just as they may approve you for too large of an amount, they may also approve you for a lesser amount or deny you a mortgage altogether. Lack of time at a job, insufficient credit, collections, past bankruptcies, or other financial issues can cause major problems when trying to secure a mortgage. Fortunately, we have lending partners that have consistently been able to overcome many of these issues with clients.

All in all, always focus on your own monthly payment maximum.

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Step 3: Shopping with a Pre-approval and Choosing a Home

Once your pre-approval is set and you have a budget, you can begin shopping for homes. Now that you have completed the first two steps, when you make an offer on a home, you will have an attractive offer for sellers that you know you can afford. Almost every listing agent and seller will not entertain offers from those who aren’t already pre-approved for a loan.  Showing them you have one from a quality lender will help get your offer accepted. In many cases, a high-quality, well-known lender is crucial to listing agents who want not just the best offer, but one that they trust the lender will close on the home.

Once you have selected the right home, we work with you to craft a fair offer based on the value of comparable homes on the market. Depending on what the home is listed at, and whether the current environment is a buyer’s or seller’s market, your offer may be below, at, or even above the asking price. We will be able to help you negotiate and we will reach an agreement. At this point, the house will go into escrow.

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4.When The Loan Goes Live

Next up, the loan process officially starts. Once we agree on the purchase contract, your lender subsequently will release your loan disclosures for you to read and sign to begin your loan approval. No one looks forward to all the paperwork involved in buying a home, but it’s a necessary part of the process. There will be times during the process that underwriting may ask for  documents beyond what you have provided already. Some items may not seem relevant, but simply follow the advice of your broker or banker, and you will be fine. Everything will ultimately be arranged by your lender and title company; so, when you’re finished, you’ll know you are fully approved and the legal owner of your new home. Once all of the conditions for underwriting have been fulfilled, you will be issued a "clear to close". At this point, we will set up a closing (or virtual closing) at the title company's office where you will sign all of the pertinent documents for your loan and new home!

Congratulations!

After signing the final paperwork to complete the purchase with the Title company, you are now the owner of a new house. It may take a few days for your loan to be funded once the paperwork has been returned to the lender, but once that check is delivered to the seller, you’ll be all set to move into the home of your dreams. 

 

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Get assistance in determining current property value, crafting a competitive offer, writing and negotiating a contract, and much more. Contact us today.

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Contact Details

Brea Group

Phone

980-242-5040

Email

[email protected]

Open hours

9 a.m - 7 p.m. Mon-Fri 10 a.m - 5 p.m. Sat

Address

10926 David Taylor Drive, Suite 120 Charlotte, NC 28262

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