The buyer’s ability to finance the property is an important contingency in most residential transactions. Buyers must act in good faith and use best efforts to obtain a loan if the sale is contingent upon obtaining a loan. Buyers often seek pre-approval from a lender prior to writing an offer. A pre-approval letter should state that the lender has reviewed the buyer’s credit report, income requirement and cash to close and pre-approves the buyer for the loan, subject to an acceptable appraisal of the property. A pre-approval letter MUST be your first step before starting you home search. Many buyers will find the house of their dreams only to discover that there is a credit issue and they can not purchase that particular home. By doing your homework and getting a pre-approval in advance, you will be looking for the appropriate home in the correct price range for your needs.
The appraiser will normally work for the lender, not the buyer. To check the status of an appraiser, visit the Appraiser Certification and Licensure Board: http://oregonaclb.org/aclb_prod/index.php. Once the appraisal has been received, the underwriter authorizes final loan approval. Only when the underwriting process is completed will an actual loan be secured. The entire financing process normally takes approximately 30-45 days. If the seller is asked to finance any part of the transaction, the buyer’s financial status will become material to the transaction. Any material defect in the buyer’s financial status must be fully disclosed to the seller. Because of the risks involved for the seller, the buyer should anticipate that the seller will fully investigate the buyer’s credit worthiness prior to agreeing to carry financing for the buyer. A real estate licensee cannot hide material information from any party to a real estate transaction and should not be asked to do so by the buyer or seller.
The first step is determining not only the person you will work with but also the type of institution. Always shop around for the best loan that fits your situation. There are many options and it is important to find a lender you are comfortable with because you will be giving that person your private financial information. Home loans are available from several types of lenders the most common being commercial banks, mortgage companies, and credit unions. Different lenders may quote you different prices, so you should contact several lenders to make sure you’re getting the best price. You can also get a home loan through a mortgage broker who arranges transactions rather than lending money directly. A broker’s access to several lenders can mean a wider selection of loan products and terms from which you can choose. First-time homebuyers should find out from lenders what loan and down-payment assistance programs they offer first-time homebuyers. In Coos County the Umpqua CDC http://www.umpquacdc.org/ has great information and programs for first time buyers including classes to teach you how to go about purchasing you first home.
Please review the following information for help with choosing a lender and loan:
