Getting pre-approved for a mortgage is a smart move for first-time home buyers. It shows sellers and agents that you are serious, qualified, and ready to make an offer. But how do you transition from pre-approval to final approval smoothly? Here are some tips to help you avoid common pitfalls and secure your dream home.
One of the most important things to do after getting pre-approved is to maintain your financial status quo. That means avoiding any major changes in your income, debt, credit, or assets. Lenders will verify your information again before final approval, so don't apply for new loans or credit cards, make large purchases or deposits, or quit or change your job. Any of these actions could affect your debt-to-income ratio, credit score, or loan-to-value ratio, and potentially jeopardize your approval.
"How to Transition from pre-approval to approval?" the most important step is getting a pre-approval from an Experienced Loan Officer that reviews the application and credit, then sends you a document checklist of the required documentation for your particular transaction & scenario. And this is the most important part!!! REVIEWS the documents to catch any issues that may "pop up" and can be addressed now, before completing the pre-approval letter.
Another key to a smooth transition is to communicate regularly with your lender. They will update you on the progress of your loan application, and let you know if they need any additional documents or information from you. Be responsive and cooperative, and provide everything they ask for as soon as possible. This will help avoid delays and errors, and show that you are a reliable and trustworthy borrower.
Before final approval, your lender will require an appraisal and an inspection of the property you want to buy. These are crucial steps to ensure that the home is worth the agreed price, and that it meets the safety and quality standards of the lender. You should choose a reputable appraiser and inspector who are familiar with the local market and the type of home you are buying. They should provide you with detailed and accurate reports, and alert you of any issues or discrepancies that could affect the value or condition of the home.
In the state where I work things may be a bit different. While you have control of who you choose as your lender, you don’t get to have any input into your appraiser. The lender hires the appraiser through a clearing house. You’re paying for it, but the appraiser is determining value and needs to be neutral to protect the lender and the buyer.
you may select your own home inspection company; however, a buyer DOES NOT have the option of selecting the appraiser. The appraisals for traditional financing are through an Appraisal Management Company (AMC), where a member appraiser will then select to take on the order or not. So as a lender we don't know who the actual appraiser will be, until it is assigned.
Depending on the results of the appraisal and inspection, you may need to negotiate with the seller about repairs or contingencies. For example, if the appraisal comes in lower than the offer price, you can ask the seller to lower the price, or make up the difference with cash. If the inspection reveals major defects or damages, you can request the seller to fix them, or offer you a credit or discount. You should work with your agent and lender to determine the best course of action, and make sure that any changes are reflected in the purchase contract and the loan terms.
The final step before final approval is to review and sign the closing disclosure. This is a document that summarizes the final loan terms, costs, and fees, and compares them to the loan estimate that you received at the beginning of the process. You should receive the closing disclosure at least three business days before closing, and you should check it carefully for any errors or discrepancies. If you have any questions or concerns, contact your lender immediately. Once you sign the closing disclosure, you are ready to close on your home.
Buyers in Oregon are entitled to their own representation by a Realtor. Your Realtor is chosen by you to represent your best interest and to negotiate on your behalf, give guidance in inspections and keep your conversation going with the seller for the outcome of your choosing. Make sure your Realtor is a good fit for you, listens to your needs and concerns and will be available for you throughout the transaction. This is the biggest purchase of your life, find an experienced guide who will have your best interest at the top of their agenda.