A credit score shows how responsible you have been in the past about your financial obligations. Having a good credit score automatically increases your chances of getting approval for a loan. A copy of your most recent credit report is required with your home loan application. You may get a free copy of your report from any of the three credit agencies: Experian, Equifax, and TransUnion.
If there have been rough patches in your life that might have affected your financial histories such as bankruptcy, divorce, or foreclosure, attach documents that vouch for the event. The lender may check on the status and my double check that the information is accurate. Meanwhile, if you have changed jobs or taken out another loan, you may inadvertently fall into the higher risk category and, as a result, your loan application gets rejected.
You typically receive your closing disclosure before your scheduled closing date. You should acknowledge receipt of the disclosure with your lender. The document will contain information about your loan terms, monthly mortgage payments, closing costs, and loan calculations.
The closing disclosure is proof that everything is accurate and you are ready to finalize the deal. This disclosure will have everything you need to know about your financial transaction. Your underwriter likely walked through the loan terms during the pre-approval process and would only have made a few adjustments based on the final price and inspection of the house.
Once the three-day waiting period is complete, you can notarize your documents, close on the home , and start the move-in process. The process of clearing your loan to close and the actual closing date begins when you make an offer on a home that an owner accepts. The inspection will alert you to any undisclosed or unknown damage like potential electrical issues or leaks , while an appraisal will confirm the true value of the property.
The sooner you have an accurate appraisal and the closer that appraisal is to the offer you made the faster you can close on a home. As the buyer, you are responsible for paying for the inspection and appraisal. With all the inspections and paperwork in order, the underwriter can review your loan and share any outstanding conditions that need to be met to clear to close.
Once these addendums have been wrapped up, your loan will be approved and you are able to close. The average time to close a home is 47 days, from the day an application for a loan is submitted to the final signed documents.
However, this number can fluctuate depending on your financial situation, your lender, and the seller who is moving away from the property. For example, if it takes longer for you to gather your paperwork and confirm your financial history, then you can slow down the closing process by several days. There are certain government-mandated waiting periods to create transparency and prevent fraud.
This could cause you to no longer qualify for your new home. In addition, if you miss paying any monthly bills since applying for your loan, it could impact your credit score and may impact your ability to qualify for the program you originally applied for. Your lender also needs to confirm your job status before closing. If you quit or lost your job since your loan approval, your loan could be denied. Even if you left your job for another job with equal pay, your loan could still be denied, or delayed, depending on the type of loan you have.
That means you should postpone taking lines of credit for furniture and other items or services until after closing. The loan is not final until you sign the papers at closing. Before you do that, you should take the time to look over the property and terms to ensure they meet your expectations.
Walking through the home and making sure no damages are present, and all negotiations between you and the seller have been settled or are underway is very important. The number provided on your initial closing disclosure is a rough estimate but gives you a rough estimate of how much money you must prepare.
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