Mortgage Information - by Paul Howard

Unless you can pay cash for your house or have another source of funds you will need to borrow the money and use the house you are buying as security for the loan. To qualify for a loan you need credit documentation, employment documentation and income documentation.

When it comes time for you to make an offer on a home it will be to your advantage if you can include documentation with your offer showing that you have been pre-qualified for your purchase offer price. Going one step further, if you can show that you are pre-approved the seller will likely treat you like a cash buyer and this can result in additional concessions.

Terms to look for: pre-approval, pre-qualification, bad credit loans (also called BCD credit), alternative credit (ie credit that does not show up on your credit report (ex. utility bills, insurance, rent and many others). Many people with 'bad credit' can get a mortgage and many people who think they have no credit actually have good alternative credit. Look for the possibilities!

The Appraisal

After the mortgage application is taken the mortgage company will order an appraisal of the home. This protects both you and the mortgage company by making sure that the home is worth what the mortgage company is going to lend you for the purchase. Some appraisals may even call for repairs to be made. You are paying for this appraisal and you are entitled to receive a copy of it. If it is not offered to you, you should ask for it.

The Closing

The closing or "the settlement" is the day you have been working toward. Here, you will pay the rest of your down payment and sign the closing documents and receive the keys to your home. When you come to the closing you will need a check to cover the closing costs that were not covered by your deposit. The check should (unless you are told otherwise) be a bank check or a certified check and it should be made out to .... yourself. You will then just sign the back and hand it over to the person processing the closing. You will be told ahead of time how much this should be made out for but you need to bring your checkbook too, in case there is some minor detail not covered. The only other things needed from you on settlement day should be some form of identification and your new homeowners insurance policy.