Phase 2: Paying for Your New Home

Information for Home Buyers Who Are Ready to Buy a House

YOUR MONEY, YOUR HOME, YOUR FUTURE

The key to successful home ownership lies in building wealth and carefully managing your money, thereby achieving financial security. Homeownership plays an integral role in your wealth-building strategy.

PROOF OF FUNDS

If you plan to purchase your next home with cash, then we will need to show to the Sellers that you have the requisite funds to purchase their property. A letter showing proof of funds from your financial institution will in most cases be sufficient to persuade Sellers that you are an excellent Buyer for their home.
However, most home buyers do not pay cash for their homes. They must borrow money from the bank in order to pay for the property. The process of borrowing money to purchase a home is called mortgage financing.

THE FINANCING SUPPLEMENTAL AGREEMENT

The type of loan, the amount borrowed, and the terms and conditions of the loan are all outlined in the Financing Supplemental Agreement, which will be submitted to the Sellers along with the proposal to purchase their home. So it’s a good idea to have spoken to a mortgage loan officer before trying to purchase your house.

THE IMPORTANCE OF MORTGAGE PRE-QUALIFICATION

When we present an offer on a property, it is important to include a pre-qualification letter from the mortgage lender so that the seller can be reasonably assured that the buyer is qualified to be purchasing the property. A letter of pre-qualification showing conditional loan approval makes a buyer much stronger during the contract negotiating process.
Therefore, it is important to start this process first, even before looking at properties. A second benefit is that the buyer will know beforehand exactly what he or she is qualified to purchase.

Often issues are revealed in the pre-qualification process that must be addressed prior to being able to get a mortgage. Such issues include mistakes on the credit report as well as legitimate issues that must be cleared up prior to getting a loan.

FINAL LOAN APPROVAL HAPPENS LATER

It is important for home buyers to understand that the pre-qualification process is a conditional loan approval. Home buyers must strive to work closely with the mortgage lender right up to closing.
The mortgage underwriter will give final loan approval after all the statements made by the buyer during the pre-qualification process have been verified. This often happens during the final days before a closing

During this period, do not spend any money except what has to be paid. Do not buy a car. Do not get another credit card. Do not even pay off existing credit cards without talking to your loan officer first. Working closely with your lender is paramount.