How to finance a home?

28th Nov 2009 by Burt Carlson

If you are interested in buying a home the first thing to do is get pre qualified with a lender. Typically the lender will have you complete a credit application. The lender will run your credit and determine the maximum loan you can qualify for. This is based on the information provided in the application. The lender may also want to review your income and asset information to verify what was indicated on the application. Once the lender has completed their work the can pre approve you for a loan under certtain conditions including estimated down payment, debt ratio and credit score/history. As soon as you have a purchase contract your lender will begin processing your loan. At some point an underwriter will review your loan and approve it based on the information in your loan file. If the loan file is missing any items the underwriter will list these and request they be provided. These items are called conditions. Once the conditions have been met the underwriter will issue a final approval and loan documents can be prepared. The loan documents are sent to a third party (title or escrow company or someone acting in this capacity) who reviews them to insure all of the escrow instructions have been met. Following this review a loan document signing date is set and the loan documents are signed. After signing the escrow agent reviews everything and if all is OK the agent requests funds from the lender. The loan is then funded and the buyer gets the keys to their home.

This answer is the subjective opinion of the writer and not of FinancialAdvisory.com