First Time Homebuyer Information & Education
Submitting your purchase offer
Submitting your purchase offer - You have finally found the home you want to buy and you have been pre-qualified by your lender. The next step in the process is submitting your offer to the seller. This is done with a Real Estate Purchase Agreement (REPC).
Many times and in most housing markets you are not going to place a bid on a home for the price that the sellers are asking for a home. However, if you are looking to buy a home in a very hot market, in an area where homes are selling extremely quickly, or if you find a home that is listed well below market value you may want to bid the asking price to have a good chance at getting the home before you are outbid. Placing a bid on a home and signing the purchase agreement does not guarantee that you have bought the house or that the sellers have to sell you the home. The property sellers have to accept your bid for the contact to be legally binding. Once the purchase price has been agreed upon and the real estate purchase contract has been signed by all parties you will normally have 5-7 days to submit a mortgage application to a mortgage professional. However, since most Realtors will require a pre-approval letter before you can place a bid on a home most of the you will already have a mortgage application submitted before you have submitted your purchase offer. Submitting your loan application to a mortgage lender will generally begin the mortgage process and the financing of your new home.
Depending on your situation you may be able to have your purchase agreement contingent on certain factors that are important to you. For example if you are selling your current home, you may want to make the purchase of the new house contingent on the sale of your existing home. While this does protect you as the buyer in the event your home does not sell, the sellers may be willing to accept a lower priced offer that does not have any contingencies. A qualified Realtor will be able to give you advice about how best to handle your situation.
Do you have little cash on hand for a down payment or closing costs? If so you should be sure to consider using a seller concession to reduce your out of pocket closing costs. Many lenders allow the seller to contribute 3% - 6% of the purchase price to closing costs. If a seller concession is important to you make sure both your real estate agent and your loan officer are aware of your goals.
Also, a personal letter of intent may be helpful in having your offer stand out above other purchase offers the sellers may receive.
Consider getting a pre-approval/pre-qualification certificate from a mortgage broker to accompany the offer. Or at the very least attach a copy of your credit report to the purchase offer to show that you have good credit history and the capability to acquire a home loan. When presented with similar offers, sellers look favorably upon the buyer who can demonstrate that the transaction is unlikely to fall through due to the buyer's inability to secure home financing.
Before submitting a purchase offer, a buyer should get pre-approved for a home loan. The purchase offer should reflect the terms of his mortgage accounting for seller concessions needed, lender inspections required, and time lender/broker needs to complete transaction.
Home Purchase Loans - One of the many issues concerning Home Purchase Loans is the size of the down payment. The down payment is the difference between the loan amount and the lower of sale price or appraised value. Many borrowers have no down payment decision to make because they donít have the money for one. Their challenge is qualifying for a loan without a down payment, for which purpose excellent credit is critically important.
The bottom line is that different lenders offer the best deal in different market niches, and shopping for a Home Purchase Loan is the only way to find out who offers the best deal on your loan. Call or do a quick online aplication with First Security Financial Services, Inc. to find out what your best home purchase loan would be.
Home purchase loans often require your downpayment and any assets being claimed on your mortgage application to be "sourced and seasoned" for 2 months or more, meaning you will have to account for where the money came from and tie the money up in your bank accounts for the period of time stipulated by the mortgage company, prior to the close of the loan.
Another consideration when looking for a Home Purchase Loan is shopping lenders. Lenders vary the terms they offer borrowers based on a large number of loan, borrower and property characteristics that they believe affect the risk or cost of the loan to them.
When looking to purchase a home it is important to have your W2's, most recent paystubs, 2 months of statements of your most recent asset statements (401k, IRA, mutual funds, checking accounts, savings accounts, money market accounts, etc...), and copies of 12 months of cancelled rent checks (if you have them) readily available to get pre-approved for a mortgage. You can get pre-qualified based on providing most of this information over the phone, however if you want to get pre-approved you will most likely need to provide your mortgage agent this information for a more accurate and more reliable pre-approval. There is a difference between a pre-qualification and a pre-approval. To be pre-qualified is a generic term used that is based on loosely obtained information. However, a pre-approval is a more accurate and more reliable approval that is required by most Realtors and Sellers to show your good faith and your seriousness about bidding on and buying a home.
Home purchase loans are readily available to all types of borrowers even those with credit issues. Home purchase loans today come with low downpayment requirements. It is even possible to get a home purchase loan without a downpayment at all.Plus, there are numerous government loan programs for low income borrowers which do not place a great emphasis on past credit history.
If you are worried about getting loans for the down payment of your new home and you have a bad credit history, donít worry. You have a solution, bad credit loans will help you out of this condition. If you have slow credit, no credit or bankruptcy, many companies can help you to sort out the situation with bankruptcy financing. However, this will be done at a high interest rate. You can then work out with your creditors how you should pay debt off. They will provide complete credit and debt help, and tips as well.
Information listed above is to be used for educational purposes only and is not guaranteed
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