Home Loan Steps For Purchasing Southern CA Properties

There are several major distinct steps in the home purchase process, and many relate to obtaining a mortgage loan. It may be complicated for both first time and repeat home buyers. This blog details important details on home loan steps for purchasing Southern CA properties and includes what you should know prior to beginning the process.

Home Loan Steps For Purchasing Southern CA Properties

The Pre-approval

A pre-approval is an introductory analysis of your finances and credit rating to determine what you may be able to receive as a loan. It verifies that you meet the primary criteria for financing. Pre-approvals do not certify that you will ultimately be approved for financing, but is a natural first step in the loan process.

Mortgage Application

A formal application is submitted typically after you have an agreement to purchase a property. You may be required to furnish additional financial paperwork and information. The details on the property are also submitted to the mortgage company for review. They will require a copy of the Purchase agreement in order to proceed. Your contract will typically specify that you complete an application before a specific deadline.

Performance of an Appraisal

An appraisal is needed by the mortgage company (although buyers are typically carry the burden for the expense) to pinpoint the current market value of the real estate. Appraisers will evaluate recent home sales and compare them to the one that you are buying. A specific dollar value is provided. Ultimately, the property value must justify the amount that the mortgage company is loaning to you.

Commitment Letter

After your financial information and the property details are analyzed, the lender issues a letter of commitment. This confirms that no major issues exist and that the lender is fairly certain that the mortgage will obtain approval. There can be a few conditions noted in the commitment such as an employment verification and final credit check. Thus, it is important not to make major purchases or alter your financial situation even after a letter is issued as it may keep the mortgage from closing.

Clearance to Close

A clear to close is basically the ending approval of a mortgage. It affirms that all requirements have been completed and that the lender can release the file to the closing agent. This can occur just days before the anticipated settlement date.

Closing the Loan

The closing involves signing of forms and filing of paperwork into public record. Be sure to have official identification and certified funds for any monies due. Personal checks or cash are ordinarily not acceptable.

Final Words of Wisdom

Deadlines are a critical factor of any real estate transfer, so make sure that you know the dates and what you must perform to satisfy each one. Getting representation from a experienced mortgage professional and real estate agent will be very important. They can provide you with guidance and assistance, stay on top of deadlines, and make it a more positive experience. As a local real estate professional, I will offer help with the mortgage and overall home purchase process. You may reach me, Matthew Rapoport, at Homes Inc. via phone at (213) 334-4141 or email at [email protected]