The financing process has always been a stressful and tedious process and many times you feel like your left all on your own to figure it out. Fortunately here are some things you should know before you make that major decision to purchase a Dupont home. Before one begins the search for a home it’s best to get a pre-approval from a reputable bank or credit union. When you request a pre-approval they will ask for your monthly income, pay stubs, bank accounts and depending on which lender you use they can request more information from you before they decide to approve you.
Next, after you have got a pre-qualification and a round number of what you can afford you can now look at homes available in Dupont or other communities. When choosing your home it’s important to understand the differences in banks financing a condo and a single family residence.
Financing for a condo can be difficult at times when a certain percentage of the condo community is rented. Banks can have various ratios for this, but it’s important that you check the ratio with your loan officer before you make a decision to purchase a condo. The reason for this is because condo lawsuits peaked during the boom in real estate prices and banks became cautious of lending towards condos. Also condos can be difficult to get a second mortgage on.
If you choose to purchase a single family residence, then the financing regulations are much more lenient. The best thing about purchasing a single family residence is that there is more potential for future appreciation. Even if may not have any at the moment , when prices start to rise single family homes statistically show more appreciation in value in the longer run.
Once you have selected your home and return to the lender the lender will then give you a final approval once he verifies all the information you have provided him such as paystubs, income, bank statements, assets, debts, etc. Once you have a final approval escrow will be opened at one of your local escrow companies such as Stewart Title, American Title Insurance, and many others. Home insurance will also be opened and the bank will request what’s called an insurance binder with all your terms to be sent to them. Note that financing will not be complete until that insurance binder is delivered to the bank. Many times the single reason that the closing process is held up is because the insurance binder hasn’t been sent or created, so always follow up with the home insurance company that you choose.
After the binder has been sent, the home being purchased comes out to appraised value, and inspection contingencies have been met, then the lender should be ready to close on your Dupont home.
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