|
What happens after I apply?
The lender initiates a credit check and arranges for an appraisal of the property
you plan to buy (or the current property you want to refinance). The appraisal
assures you and the lender that the property has fair market value. The lender
is investing in you and, in the unlikely event of default on your loan, the property
must be worth enough to settle the debt.
Once your credit check, appraisals and verifications are complete, this “credit
package” is reviewed by an underwriter who makes the loan decision. If your loan
is approved, your lender will issue you a loan commitment (a binding agreement)
to lend you the money. The commitment spells out all the details of the loan including
all charges and fees, closing requirements, and any important conditions including:
- A list of documents you will need for closing;
- Information on when the commitment expires; and
- Important information you should know when closing on your home.
The loan commitment may also may have certain conditions that you must meet before
the loan is granted—bills you must pay off, or special requirements of the homeowners
association, fox example.
In the case of new construction, the lender will want the appraiser to inspect
the home just prior to closing. This is to ensure that it is in accordance with
the plans and specifications furnished by the builder or contractor.
You and an attorney (if you choose to have an attorney represent you) should
review the loan commitment carefully. Make sure the terms are acceptable to you.
Assuming you and the lender come to terms, your agreement with the lender is now
complete.
<< Back |