For many Montrose Colorado residents, purchasing Montrose Co real estate is often the largest investment decision they will will make during their lifetime.
Purchasing Montrose Co real estate should be a fun and exciting experience. Understanding the process for obtaining a home mortgage loan can help you be prepared for what to expect and will help put your mind at ease so you can focus on the important things like finding your Montrose Colorado dream home!
7 Absolute Essentials for Buying Montrose Co Real Estate
1. Loan pre-approval
Most of the time in Ouray and Montrose Colorado, a seller will only accept an offer on their home if it is accompanied with a pre-approval letter from a lender. Homes for sale in Montrose Colorado are moving very quickly right now, and it’s prudent to be ready to house hunt with your loan in place rather than trying to scramble to get pre-approved before the home your interested in gets snatched up by somebody else.
The pre-approval process also allows you to discuss options and details with your lender. Things like the type of loan that will best fit your situation, the terms of the loan such as minimum down payment amount, what an expected mortgage payment would be on said loan, and even which type of real estate could be purchased with the loan.
“Credit, income, and assets are the criteria that will be reviewed to determine if you’re pre-approved.”
There are many intricacies to the details and requirements of obtaining a mortgage, and I would suggest that you do not put off that initial meeting with your lender. It is always best to get that meeting done as early as possible in case of credit repair needs or other aspects that could affect your ability to qualify.
“I have met with many clients over the years who have procrastinated that initial meeting only to learn that they have to do something simple and wait for 6 months before they would be in a position to buy.”
2. Home Search
Possibly the most exciting part other than the closing. Who does not like to go shopping? After you are pre-approved, sit down with your real estate agent and discuss the parameters of your pre-approval in regards to the price range that you are wanting to search in and the type of home you are wanting. Your agent will be able to get you into any home that is on the market, and will work for you in presenting offers and negotiating with the seller’s agent.
3. Formal loan application and product selection
After you are under contract, it is time to move forward with the loan. Sometimes, you would have been pre-approved for a few different types of loans and depending on the situation you would now decide which loan you would like to proceed with. Now that you have an address, you can lock in your interest rate and update any documentation that has become outdated since the pre-approval status.
4. Appraisal & Home inspection
This will take place simultaneously to your loan being processed. The property will need to be appraised to ensure that the value supports the price you are paying for the home. The appraiser would also flag any health, safety or structural issues with the home. Many buyers opt to order a home inspection during this time as well. A home inspector will do a much more thorough inspection of the property as compared to the appraiser whose purpose is more to obtain a value and point out any blatant issues.
5. Underwriter’s review
After the loan has been processed, and all of the necessary documentation has been gathered, the loan processor will submit the loan to underwriting. The underwriter’s job is to ensure that the loan meets agency guidelines. The underwriter may ask for additional documentation at this time.
6. Final loan approval
After any requested underwriting conditions are sent back in, the underwriter will review and issue a clear to close.
Definitely the most exciting part! The lender will send closing instructions to the title company and a HUD-1 will be prepared along with your closing documents. The HUD-1 will illustrate all of your costs and bring them all into one line. You will bring a cashier’s check or set up a wire for your funds (if you are bringing any money to closing). After you and the seller have signed the documents, the loan will fund, the seller will be paid, and you will receive the keys to the home.
The important part is to be proactive and educate yourself on the process so that you will know what to expect so that you can enjoy the process. We are here to walk you through it, and to make it as smooth as possible.
Eric Mott 970-249-1615