Rochester Real Estate | LOCAL Homes For Sale https://www.rochesterrealestateblog.com Rochester Real Estate | LOCAL Homes For Sale | Homes for sale in Rochester, NY, LOCAL Rochester real estate listings, market data, REALTOR® info, and high quality content updated every 15 minutes! Wed, 25 Jun 2025 11:50:30 +0000 hourly 1 https://wordpress.org/?v=6.7.2 https://www.rochesterrealestateblog.com/wp-content/uploads/2016/11/cropped-SITE-LOGO-512-x-512-1-32x32.png How To Get Approved For A Mortgage When Buying A Home – Rochester Real Estate | LOCAL Homes For Sale https://www.rochesterrealestateblog.com 32 32 June Home Maintenance Checklist: 40+ Must-Do Tasks to Prepare Your Home for Summer https://www.rochesterrealestateblog.com/june-home-maintenance-checklist-summer-prep/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=20501 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> May Home Maintenance Checklist: 30 Essential Tasks to Prepare Your Home for Summer https://www.rochesterrealestateblog.com/may-home-maintenance-checklist/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=20484 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> April Home Maintenance Checklist: How To Prepare Your Rochester NY Home For Spring https://www.rochesterrealestateblog.com/april-home-maintenance-checklist/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=20364 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> March Home Maintenance Checklist: Get Your New York Home Ready for Spring https://www.rochesterrealestateblog.com/march-home-maintenance-checklist/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=20338 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How to Buy a House in New York https://www.rochesterrealestateblog.com/buy-a-house-in-new-york/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19906 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How to Sell a House in New York https://www.rochesterrealestateblog.com/sell-a-house-in-new-york/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19905 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Risks of Buying a Non-Warrantable Condo In New York: What You Need to Know https://www.rochesterrealestateblog.com/non-warrantable-condo/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19796 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What Builders Should Know About Spec Construction Loans In New York https://www.rochesterrealestateblog.com/builders-spec-construction-loans/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19795 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Moving To The Finger Lakes Region Of New York | Guide To Relocating To The Finger Lakes https://www.rochesterrealestateblog.com/moving-to-the-finger-lakes-region/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19875 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Navigating the Numbers: The Pros and Cons of Using Online Home Value Estimators For New York Real Estate https://www.rochesterrealestateblog.com/pros-cons-online-home-value-estimators/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19794 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> The Role of Location in Home Valuation In New York https://www.rochesterrealestateblog.com/role-of-location-home-valuation/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19768 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Lowe’s vs U-Haul: A Review of Truck Rental Companies https://www.rochesterrealestateblog.com/lowes-vs-uhaul/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19758 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Understanding the Importance of a Seller’s Property Condition Disclosure https://www.rochesterrealestateblog.com/property-condition-disclosure-statement/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19632 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What are Delayed Showings and Negotiations in Real Estate In New York? https://www.rochesterrealestateblog.com/delayed-showings-negotiations/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19547 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> 8 Viable Tactics to Selling Your Home and Moving Out of State https://www.rochesterrealestateblog.com/selling-home-moving-out-of-state/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19542 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Unconventional Methods for Selling a House: Thinking Outside the Box https://www.rochesterrealestateblog.com/unconventional-methods-for-selling-a-house/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19519 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Should I Sell My House Off Market: Pros and Cons Explained https://www.rochesterrealestateblog.com/sell-house-off-market/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19503 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What is PITI and How Does It Affect Your Mortgage https://www.rochesterrealestateblog.com/what-is-piti/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19498 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How To Set A Home Renovation Budget https://www.rochesterrealestateblog.com/home-renovation-budget/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19490 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How Does A Co-Borrowers Credit Scores Affect A Home Purchase? https://www.rochesterrealestateblog.com/co-borrower-credit-score/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19474 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> New Construction Final Walk-Through Checklist: Ensuring a Seamless Home Inspection https://www.rochesterrealestateblog.com/new-construction-final-walk-through/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19458 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Essential Tips for Pumping a Septic Tank: What You Need to Know https://www.rochesterrealestateblog.com/pumping-a-septic-tank/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19450 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Can You Submit Multiple Offers On Homes At Once – A Legal And Ethical Analysis https://www.rochesterrealestateblog.com/multiple-offers-on-homes-at-once/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19414 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How to Get Your Home Photo Ready for Real Estate Listings https://www.rochesterrealestateblog.com/real-estate-photo-ready/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19409 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What Does a Home Builder’s Warranty Cover? https://www.rochesterrealestateblog.com/home-builders-warranty/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19394 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> July 2023 Greater Rochester NY Area Real Estate Market Update https://www.rochesterrealestateblog.com/july-2023-rochester-ny-real-estate-market-update/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19403 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Who Pays Real Estate Commission When You Buy or Sell a Home https://www.rochesterrealestateblog.com/real-estate-commission/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19366 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Quitclaim Deeds: What You Need to Know https://www.rochesterrealestateblog.com/quitclaim-deeds/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19358 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What to Know About Selling a Home As Is for Cash https://www.rochesterrealestateblog.com/selling-home-as-is-cash/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19347 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How to Know if My House Has Paranormal Activity https://www.rochesterrealestateblog.com/is-my-house-haunted/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19342 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Why Find The History of a House https://www.rochesterrealestateblog.com/find-history-house/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19316 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> June 2023 Greater Rochester NY Area Real Estate Market Update https://www.rochesterrealestateblog.com/june-2023-rochester-ny-area-real-estate-market-update/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19313 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What Does a Real Estate Lawyer Do? https://www.rochesterrealestateblog.com/real-estate-lawyer/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19181 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> May 2023 Greater Rochester NY Area Real Estate Market Update https://www.rochesterrealestateblog.com/may-2023-rochester-ny-area-real-estate-market-update/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19162 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What to Know About Buying a Home For The First Time https://www.rochesterrealestateblog.com/buying-home-first-time/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=19058 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> <strong>What Should a Buyer Look For at a Home Inspection?</strong> https://www.rochesterrealestateblog.com/what-look-for-home-inspection/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18983 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Companies That Buy Houses For Cash Reviewed https://www.rochesterrealestateblog.com/companies-buy-houses-for-cash/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18889 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Does Home Staging Work and What is The Cost? https://www.rochesterrealestateblog.com/does-home-staging-work/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18814 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What to Avoid When Getting a Mortgage https://www.rochesterrealestateblog.com/avoid-when-getting-mortgage/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18797 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> <strong>5 Options For Replacing a Roof Reviewed</strong> https://www.rochesterrealestateblog.com/replacing-roof/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18771 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What Are Restrictive Covenants in Real Estate? https://www.rochesterrealestateblog.com/restrictive-covenants/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18714 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Can The Court Force The Sale of Your House in Divorce? https://www.rochesterrealestateblog.com/court-force-sale-divorce/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18693 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Real Estate Agent vs. Broker: What&#8217;s The Difference? https://www.rochesterrealestateblog.com/real-estate-agent-vs-broker/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18650 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How To Determine Square Feet In Your House For More Accurate Property Estimates https://www.rochesterrealestateblog.com/determine-square-feet/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18167 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> 3 Things That Often Results in a Real Estate Agent Getting Sued https://www.rochesterrealestateblog.com/real-estate-agent-sued/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18133 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> The Top 5 Types Of Home Inspections Buyers Should Consider https://www.rochesterrealestateblog.com/5-types-home-inspections/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18119 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> The Pros And Cons Of Rent To Own Homes: What You Need To Know https://www.rochesterrealestateblog.com/pros-cons-rent-own-homes/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18104 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> 5 Smart Things To Do Before Moving That Will Help Ease Your Transition https://www.rochesterrealestateblog.com/things-before-moving/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18084 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How to Become a Real Estate Agent https://www.rochesterrealestateblog.com/become-real-estate-agent/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=18071 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Renting A House Or An Apartment: Which Is The Better Option https://www.rochesterrealestateblog.com/renting-house-apartment/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=17871 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> The 5 Most Important Factors To Consider When Buying A House https://www.rochesterrealestateblog.com/5-factors-buying-house/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=17851 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What Buyers And Sellers Need To Know About An Appraisal Gap https://www.rochesterrealestateblog.com/appraisal-gap/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=17827 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Pros And Cons Of Renting With Roommates – What You Need To Know https://www.rochesterrealestateblog.com/renting-with-roommates/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=17794 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> 6 Things You Should Know About Buying Land https://www.rochesterrealestateblog.com/things-know-buying-land/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=17773 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How Long Should Home Sellers Wait To Respond To An Offer On Their Home? https://www.rochesterrealestateblog.com/home-sellers-wait-respond-offer/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=17745 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How To Buy A House With A Low Credit Score https://www.rochesterrealestateblog.com/how-to-buy-a-house-with-a-low-credit-score/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=16819 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Things To Consider When Shipping A Car https://www.rochesterrealestateblog.com/things-to-consider-when-shipping-a-car/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=16248 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Home Depot Truck Rentals: What to Know Including Pricing https://www.rochesterrealestateblog.com/home-depot-truck-rentals-what-to-know-including-pricing/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=16156 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> 16 Things To Do Before Listing Your Home For Sale https://www.rochesterrealestateblog.com/16-things-to-do-before-listing-your-home-for-sale/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=16138 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> The Biggest Home Inspection Mistakes to Avoid https://www.rochesterrealestateblog.com/biggest-home-inspection-mistakes-to-avoid/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=16112 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How Your Credit Score Impacts Your Ability To Buy A House https://www.rochesterrealestateblog.com/how-credit-score-impacts-buying-house/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=16086 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Top Winter Home Selling Mistakes | 7 Errors Made While Selling A House During The Winter https://www.rochesterrealestateblog.com/top-winter-home-selling-mistakes/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=16051 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Top Winter Home Buying Mistakes | 11 Errors Made While Buying A House During The Winter https://www.rochesterrealestateblog.com/winter-home-buying-mistakes/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=16013 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What Address Change Form Should I Use At The Post Office? https://www.rochesterrealestateblog.com/address-change-form-post-office/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=15981 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What Does Contingent Status Mean in Real Estate? https://www.rochesterrealestateblog.com/what-does-contingent-status-mean-real-estate/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=15956 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> DIY Renovation Ideas For Your Backyard https://www.rochesterrealestateblog.com/diy-renovation-ideas-backyard/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=15937 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How to Rent Your First Apartment Guide https://www.rochesterrealestateblog.com/how-to-rent-an-apartment/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=15931 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Tips For Selling A Home Virtually https://www.rochesterrealestateblog.com/tips-selling-a-home-virtually/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=15907 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> The Complete Winter Storage Checklist For Your Belongings https://www.rochesterrealestateblog.com/winter-storage-checklist/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=15885 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Should I Waive My Home Inspection When Buying A House? https://www.rochesterrealestateblog.com/should-i-waive-my-home-inspection/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=15870 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> The Biggest Self Storage Companies Reviewed https://www.rochesterrealestateblog.com/biggest-self-storage-companies/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=15836 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Earnest Money and House Deposits Explained https://www.rochesterrealestateblog.com/earnest-money-house-deposits-explained/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=15760 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Moving Mistakes To Avoid https://www.rochesterrealestateblog.com/moving-mistakes-to-avoid/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=15568 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Top Mortgage Myths | Demystifying Common Home Loan Misconceptions https://www.rochesterrealestateblog.com/top-mortgage-myths/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=15102 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> First-Time Home Buyer Mistakes to Avoid https://www.rochesterrealestateblog.com/first-time-home-buyer-mistakes/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=14815 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> 10 Tips For Adding Appeal To Your Home This Summer https://www.rochesterrealestateblog.com/10-tips-adding-appeal-to-home-this-summer/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=14237 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Exploring The Merits of Smart Home Technology When Selling a Home https://www.rochesterrealestateblog.com/smart-home-technology-selling-a-home/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=13782 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Top Frequently Asked Questions From Home Sellers https://www.rochesterrealestateblog.com/top-frequently-asked-questions-home-sellers/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=2424 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> First Time Home Buyer Programs In Rochester NY &#8211; Updated January 2025 https://www.rochesterrealestateblog.com/first-time-home-buyer-programs/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock http://rochesterrealestateblog.com/?p=580 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How New Doors &#038; Windows Can Boost Your Home Value https://www.rochesterrealestateblog.com/how-new-doors-windows-boost-your-home-value/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=13643 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Top 5 Things To Know When Flipping Your First House https://www.rochesterrealestateblog.com/5-things-to-know-when-flipping-your-first-house/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=13574 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What Are The Best Mortgage Options for Self Employed Borrowers? https://www.rochesterrealestateblog.com/mortgage-options-for-self-employed-borrowers/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=13450 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Top 10 Best Places To See Christmas Lights In Rochester NY https://www.rochesterrealestateblog.com/top-10-best-places-see-christmas-lights-rochester-ny/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=10236 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What Are The PROs And CONs Of Multifamily Homes? https://www.rochesterrealestateblog.com/what-are-the-pros-and-cons-of-multifamily-homes/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=13219 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> What Low-Cost Home Improvements Should You Make Before Selling Your Home? https://www.rochesterrealestateblog.com/low-cost-home-improvements-you-should-make-before-selling-your-home/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=13114 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> 15 Things Millennial Home Buyers Look At While Buying A House https://www.rochesterrealestateblog.com/15-things-millennial-home-buyers-look-at-while-buying-a-house/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=13028 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How Does A Fence Increase The Value Of Your Home https://www.rochesterrealestateblog.com/how-does-a-fence-increase-the-value-of-your-home/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=12995 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> 5 Simple &#038; Low Cost Fixes To Make Your Home More Appealing To Buyers https://www.rochesterrealestateblog.com/5-simple-and-low-cost-fixes-to-make-your-home-more-appealing-to-buyers/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=12779 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How To Improve A Homes Curb Appeal In Rochester NY https://www.rochesterrealestateblog.com/how-to-improve-a-homes-curb-appeal-rochester-ny/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=12665 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> 7 Ways to Create an Energy-Efficient Home While Conserving Your Budget https://www.rochesterrealestateblog.com/7-ways-create-an-energy-efficient-home/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=12633 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Hiring Movers Vs. Moving Yourself | The PROs &#038; CONs Of Each https://www.rochesterrealestateblog.com/hiring-movers-vs-moving-yourself/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=12592 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Should You Pay Off Student Loans Before Purchasing a Home? https://www.rochesterrealestateblog.com/pay-off-student-loans-before-purchasing-a-home/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=12531 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Should I Build A New Home Or Buy An Existing Home? https://www.rochesterrealestateblog.com/should-i-build-a-new-home-or-buy-an-existing-home/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=2497 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> Buying A Condo Vs. Renting A Condo | What Are The PROs &#038; CONs? https://www.rochesterrealestateblog.com/buying-a-condo-vs-renting-a-condo/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=12402 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> 9 Money Saving Moving Tips | How To Cut Costs When Moving https://www.rochesterrealestateblog.com/9-money-saving-moving-tips/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=12341 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> How to Create a Proper Home Maintenance Checklist https://www.rochesterrealestateblog.com/how-to-create-a-proper-home-maintenance-checklist/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=12300 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> 5 Tips For Tenant Screening | How To Weed Out Bad Tenant Applicants https://www.rochesterrealestateblog.com/tips-for-tenant-screening/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=12291 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> The Best Social Media Blogs For Real Estate From 2017 https://www.rochesterrealestateblog.com/best-social-media-blogs-2017/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=12045 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> The Best Home Improvement Blogs From 2017 | Advice For Home Remodeling https://www.rochesterrealestateblog.com/best-home-improvement-blogs-2017/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=12044 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
Subscribe To Our Blog (it's FREE) & You'll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner
About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]> The Best Mortgage Blogs From 2017 | Advice For Home Financing https://www.rochesterrealestateblog.com/best-mortgage-blogs-2017/ Tue, 29 Mar 2016 11:30:31 +0000 Kyle Hiscock https://www.rochesterrealestateblog.com/?p=12043 Guide To Getting Approved For A Mortgage [caption id="attachment_3816" align="aligncenter" width="450"]How To Get Approved For A Mortgage When Buying A Home How To Get Approved For A Mortgage When Buying A Home[/caption] One of the most common home buying FAQs from not only first time home buyers but buyers in general is, "what are the steps for getting approved for a mortgage?"  Many buyers don't understand what a mortgage approval is, why it's important to get approved for a mortgage when buying a home, and also what the steps are for getting an approval. One of the most important steps in the home buying process is getting approved for a mortgage.  Without a mortgage approval a buyer puts themselves at a huge disadvantage when compared to other buyers in the marketplace.  This is especially true if a buyer is buying a home in a sellers market. In this article you will find out how to get approved for a mortgage when buying a home.  Not only will you find out what the steps are to getting a mortgage but also you'll find some helpful information about what it means to get approved for a mortgage and why it's important when buying a home.

What Does It Mean To Get Approved For A Mortgage?

One of the most common misconceptions that home buyers have is that a pre-qualification and pre-approval are the same.  This is absolutely incorrect and there are actually many differences between a pre-qualification and a pre-approval. When buying a home, it's very important what it means to be pre-approved for a mortgage.  A mortgage pre-approval is when a lender provides a buyer a written commitment to a buyer after they've verified many documents and information that has been provided by a buyer.  This is a huge difference between a pre-approval and a pre-qualification, since pre-qualifications are typically issued after receiving verbal information from a buyer, not actual documentation. To be approved for a mortgage a buyer must supply a lender important documentation and proof, such as bank statements, tax returns, and employment verification.  Once an approval is issued for a mortgage there are generally conditions that still need to be satisfied, however, there are fewer than a pre-qualification because the documentation and proof has been verified by the lender already.

Why Is It Important To Get Approved For A Mortgage When Buying A Home?

Getting approved for a mortgage is very important when buying a home, for several reasons.  Many buyers don't understand why real estate agents ask for a pre-approval before showing them homes. One reason why having an approval for a mortgage is important is because an approval will educate a buyer on the price range of homes they should be looking at.  It makes absolutely no sense for a buyer to look at a home that is listed for $250,000 if they only can get approved for a $200,000 loan. Another extremely important reason to get approved for a mortgage when buying a home is that an approval makes you stronger in the marketplace.  Once you find a home that you love and want to pursue, being approved for a mortgage increases the chances that your offer will be accepted. Being approved for a mortgage is even more important in a competitive sellers market.  As one of the top Realtors in Rochester NY, which is a very competitive sellers market right now, an approved buyer has a leg up on their competition who are only pre-qualified from a sellers viewpoint.  A seller is going to accept an offer from an approved buyer versus a pre-qualified buyer, assuming the offers are somewhat similar. There are other reasons why being approved for a mortgage when buying a home is important, such as;
  • Eliminates heartbreak if a buyer is unable to get a mortgage after finding a property they love
  • An approved buyer has better leverage when negotiating with a seller
  • Allows a buyer to move quicker
  • Proves to a real estate agent that a buyer is a ready, willing, and able buyer
 

What Are The Steps For Getting Approved For A Mortgage?

[caption id="attachment_3817" align="aligncenter" width="450"]Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home Step-By-Step Guide - How To Get Approved For A Mortgage When Buying A Home[/caption] The process of getting approved for a mortgage can vary slightly, however, the steps involved are fairly similar in most circumstances.  If you're wondering what the steps are for getting approved for a mortgage, read on to find out.  Below you will find out what happens from initial contact with a mortgage broker to when the final clear to close is received.

Shop Around For A Local Mortgage Broker

The first step towards getting approved for a mortgage is to shop at a couple of the top local mortgage brokers.  It's very important to know how to interview real estate agents when buying a home, but it's also very important you know how to find a top local mortgage broker. As you notice, the word "local" is in bold in two places above.  This is to stress the importance of finding a local mortgage company when getting approved for a mortgage.  One reason why getting approved by a local mortgage broker is important is because the loan will be processed and underwritten at the local level.  Getting approved for a mortgage by a large, national mortgage broker may mean that your file is not reviewed, processed, and underwritten locally, which can certainly come with some challenges throughout the process. When shopping around for a local mortgage broker it's recommended that you do some research on who the top local mortgage companies are in your area.  If you're not sure if a company is quality or not, you should consider asking your real estate agent who they suggest for local mortgage companies.  A top real estate agent will have several top mortgage consultants that they've worked with in the past that they know do a great job. If you're looking to get a mortgage in Rochester, NY to purchase a home and are unsure of who the top Rochester NY mortgage companies are, click the image below, fill in the form with your information, and I'd be happy to suggest a couple top mortgage lenders in the area for you to contact! [caption id="attachment_3819" align="aligncenter" width="851"]Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers Click -Ask An Expert- For Recommendations To Top Rochester, NY Mortgage Brokers[/caption] As you shop around at local mortgage brokers, it's important to find out from each of them if they have a cost breakdown.  One pretty popular frequently asked question about mortgages relates to what fees a lender charges.  Each lender will have different charges for their applications, underwriting, processing, and a variety of other fees.  It's suggested that you ask for a cost breakdown from each lender you're thinking about using. The process of getting a mortgage involves disclosing information about your financial history, so it's important as you shop around that you're comfortable with the mortgage consultant.  Since you'll be sharing information about your finances, if you're not comfortable with the consultant, it can make for a very uncomfortable and poor experience.

Complete The Mortgage Application

Once a buyer decides which mortgage broker they would like to get their mortgage from, the next step in the process of getting approved for a mortgage is to complete the formal mortgage application. One important part of the mortgage application is the type of loan and the terms of the loan.  For buyers who are asking themselves, "what type of mortgage is best for me," they need to discuss with their mortgage consultant about their options.  Is a 30 year fixed mortgage the best fit or possibly an adjustable rate mortgage? Some buyers believe they have to find a property before completing their mortgage application since it is a part of the application.  This is not necessary, since a mortgage approval can be issued with a condition of finding a suitable property. Other information that will be required to complete the mortgage application includes the borrowers information, assets, liabilities, employment information, income, and expenses.  When a buyer applies for their mortgage, they will be instructed on the documents they will need to bring to their application appointment.  A buyer who understands what documents are needed when applying for a mortgage will make the process seem less stressful and also will expedite the approval process.

Bank Appraisal Is Completed

[caption id="attachment_3818" align="aligncenter" width="450"]Guide For Getting Approved For A Mortgage Guide For Getting Approved For A Mortgage[/caption] Anytime a mortgage is involved as the type of financing in a real estate transaction, a bank appraisal is going to need to be completed.  A bank appraisal is a detailed evaluation of a properties value by a non-biased professional who is representing the lenders best interest to ensure the home is actually worth what a buyer and seller agree it's worth in a purchase offer. There are several methods to determine how much a home is worth and a bank appraisal is one method.  If a bank appraiser uses the comparable sale method, they will be looking for at least 3 sales in the past 12 months of comparable properties to the subject property to confirm the sale price is inline with the real estate markets recent sales.  This method of home valuation is similar to what a real estate agent does when completing a comparative market analysis, frequently referred to as a CMA. The bank appraisal is an important step in getting approved for a mortgage since a bank is not going to give a buyer a mortgage for more than an appraiser says it's worth.  A home that appraises for less than the sale price is one of the most common problems with bank appraisals.

File Is Sent To Processing & Underwriting

The next step in getting approved for a mortgage is the processing and underwriting of the loan.  It's important to understand when getting a mortgage what each of these professionals tasks and responsibilities include. A loan processor is responsible for preparing a buyers loan information and application to present to the underwriter.  A processor is in charge of collecting documents from a buyer, such as, updated bank statements and pay stubs.  The processor will make sure all documents that will be required to get approval for a mortgage are included and that all the numbers are calculated correctly.  A file that is properly processed and in the correct order will generally receive a commitment or declination much quicker than an unorganized file. Once the file is prepared, it is sent to the mortgage underwriter.  The mortgage underwriters responsibility is to assess and determine if a buyer is eligible for the mortgage that they are applying for.  The underwriter will either accept or reject the loan based on a buyers credit history, assets, debts, and other factors.

Mortgage Commitment Is Issued

Once a file is processed and underwritten, if the loan has been approved, a written mortgage commitment is issued to the buyer.  A mortgage commitment will outline the specific amount of the mortgage loan, the number of years to repay the mortgage, the interest rate, and other important figures.  Once the written commitment is sent to the buyer they have a specified amount of time, usually 5 to 10 days, to review the commitment, sign, and return it to the lender. Once the mortgage commitment is issued, the buyer can now be assured the financing needed to purchase the home is now ready.  Even though a mortgage commitment is issued, it is still vital that a buyer does not drastically change anything with their finances.  There are several reasons why a mortgage is denied after an approval is received. For example, recently while selling a home in Irondequoit NY, a buyer decided to purchase a new car prior to the closing.  The additional debt that was incurred by the buyer made a significant impact on their debt to income ratios which ultimately led to their mortgage being declined just before closing.

Mortgage Is Cleared To Close

Before a closing can be scheduled, the lender will need to "clear" the loan for closing.  One of the most popular reasons why a real estate deal falls through is because a buyer loses their job prior to receiving their final clear to close. Prior to clearing a mortgage for closing, a lender will complete a few tasks.  The tasks that must be completed prior to clearing the file include obtaining a "soft" credit pull, verbal verification of employment, updated bank statements, and updated pay stubs.

Closing Thoughts

The necessity of getting approved for a mortgage when buying a home cannot be understated.  There are tons of reasons why having an approval for a mortgage when shopping for a home is vital. As you can see from the above information, getting approved for a mortgage is not rocket science, however, it does require the buyer to put forth effort.  If a buyer takes several days to supply documents to a lender it will make the amount of time required to get approved for a mortgage increase. It's important while getting approved for a mortgage that a buyer is responsive and quick with obtaining documentation that is required.

Other Top Mortgage Resources & Articles

Are you looking to get approved for a mortgage in Rochester, NY?  If so, the above information and advice should help you understand what the steps are.  If you still have questions or are looking for a recommendation to a top Rochester NY mortgage broker, contact me, and I'd be happy to recommend a couple top lenders in the area.
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About the authors: The above article "How To Get Approved For A Mortgage When Buying A Home" was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.]]>