What does a lender mean in real estate?
A mortgage lender is a bank or company that provides home loans to borrowers. Some lenders also offer auto loans, personal loans, or student loans. Some offer mortgages and other home-related loans. Sometimes, one lender can offer many different types of loans.
What does a lender do?
A lender is an individual, a group (public or private), or a financial institution that makes funds available to a person or business with the expectation that the funds will be repaid. Repayment will include the payment of any interest or fees.
What are the benefits of a lender?
So, you have the upper hand on every decision you make without compromise. Both you and the lender are not subjected to strict policies outside the company. The lender decides on the suitable interest rate to charge, and you have the freedom to negotiate all the terms of the loan facility.
What's the difference between prequalification and preapproved?
Prequalification
The prequalification process is when a lender pulls your credit and asks you questions about your income and assets. This will allow them to estimate what you can afford. Being prequalified does not mean you will be pre-approved.
Pre-approved
The pre-approval process is when a lender verifies your Income and assets. You will need to provide your lender with documentation verifying what was discussed during your prequalification. Being pre-approved is a more accurate estimate of what you can afford.
What documents do I need to prepare for my loan application?
Below is a list of documents that are required when you apply for a mortgage. However, every situation is unique and you may be required to provide additional documentation. So, if you are asked for more information, be cooperative and provide the information requested as soon as possible. It will help speed up the application process.
Your Property
Copy of signed sales contract including all riders
Verification of the deposit you placed on the home
Names, addresses and telephone numbers of all realtors, builders, insurance agents and attorneys involved
Copy of Listing Sheet and legal description if available (if the property is a condominium please provide condominium declaration, by-laws and most recent budget)
Your Income
Copies of your pay-stubs for the most recent 30-day period and year-to-date
Copies of your W-2 forms for the past two years
Names and addresses of all employers for the last two years
Letter explaining any gaps in employment in the past 2 yearsWork visa or green card (copy front & back)
If self-employed or receive commission or bonus, interest/dividends, or rental income:
Provide full tax returns for the last two years PLUS year-to-date Profit and Loss statement (please provide complete tax return including attached schedules and statements. If you have filed an extension, please supply a copy of the extension.)
K-1's for all partnerships and S-Corporations for the last two years (please double-check your return. Most K-1's are not attached to the 1040.)
Completed and signed Federal Partnership (1065) and/or Corporate Income Tax Returns (1120) including all schedules, statements and addenda for the last two years. (Required only if your ownership position is 25% or greater.)
If you receive Social Security income, Disability or VA benefits:
Provide award letter from agency or organization
Source of Funds and Down Payment
Sale of your existing home - provide a copy of the signed sales contract on your current residence and statement or listing agreement if unsold (at closing, you must also provide a settlement/Closing Statement)
Savings, checking, or money market funds - provide copies of bank statements for the last three months.Stocks and bonds - provide copies of your statement from your broker or copies of certificates.
Gifts - If part of your cash is to close, provide a Gift Affidavit and proof of receipt of funds.
Based on information appearing on your application and/or your credit report, you may be required to submit additional documentation.
Debt or Obligations
Prepare a list of all names, addresses, account numbers, balances, and monthly payments for all current debts with copies of the last three monthly statements
Include all names, addresses, account numbers, balances, and monthly payments for mortgage holders and/or landlords for the last two years
If you are paying alimony or child support, include marital settlement/court order stating the terms of the obligation
What happens at closing?
The property is officially transferred from the seller to you at "Closing" or "Funding".
At closing, the ownership of the property is officially transferred from the seller to you. This may involve you, the seller, real estate agents, your attorney, the lender’s attorney, title or escrow firm representatives, clerks, secretaries, and other staff. You can have an attorney represent you if you can't attend the closing meeting, i.e., out-of-state. Closing can take anywhere from 1-hour to several, depending on contingency clauses in the purchase offer or any escrow accounts needing to be set up.
Most paperwork in closing or settlement is done by attorneys and real estate professionals. You may or may not be involved in some of the closing activities; it depends on who you are working with.
Prior to closing, you should have a final inspection, or "walk-through," to ensure requested repairs were performed and items agreed to remain with the house are there, such as drapes, lighting fixtures, etc.
In most states, the settlement is completed by a title or escrow firm in which you forward all materials and information plus the appropriate cashier's checks so the firm can make the necessary disbursement. Your representative will deliver the check to the seller, and then give the keys to you.
What is credit repair?
Credit repair is the process of hiring a company to fix your bad credit by removing inaccurate, negative information on your credit reports.
What is the importance of credit repair?
One of the main benefits of better credit is lower interest rates on all your loans. The interest rates you qualify for are connected to your credit score. Better credit means lower rates. It also means that you can get in while the getting is good on low-interest rates available now.
What are the responsibilities of credit?
You should make your payments on time, every time, according to the CFPB (Consumer Financial Protection Bureau). That's because your payment history can impact your credit scores. Any missed, or late credit card payments can not only affect your credit—depending on the card, they can lead to late fees and interest rate increases, too.
