You’re Pre-Qualified for a Mortgage. Now What?
So: You’ve gotten pre-qualified for a mortgage, you’ve put in an offer on the home of your dreams, and your offer has been accepted. Congratulations!
But don’t load the moving van yet: There are still steps left before you cross the finish line.
Finish Your Mortgage Application
If you’ve already pre-qualified with us, that’s a pretty good indication that you’re eligible for financing. At this point, you’ll just have to provide some more detailed financial information—updated bank statements, for instance, and other proof of income.
The bigger question, often, is the appraisal.
Before a lender will extend a mortgage, they want to know that the property value covers the loan amount. In other words: If you borrow $100,000 to buy a house, but it turns out to be worth only $50,000, the lender doesn’t want to be on the hook for the rest.
That’s why lenders hire an appraiser to look at the home you’re purchasing. An appraiser will visit the home you’re buying and give an independent opinion of the property’s fair market value, when compared to similar homes recently sold in the same area.
Those recent home sales—known as comps—sometimes cause headaches for Internet mortgage lenders and other commercial banks, especially in a rural area like Northern NY, where fewer homes are sold. In our neighborhoods, comps are sometimes hard to come by.
If you are trying to get your mortgage through a big lender, that can mean you’ll get turned down. At Adirondack Regional FCU, though, you might get a different answer: If you’re getting a mortgage for $200,000 or less, we skip the formal appraisal and do an in-house review. We’ll still look at recent home sales as a yardstick, and we may even call local real estate agents for their opinion, but we are still more flexible than a lot of other lenders. (That speeds up the loan process, too: Appraisers are backed up for weeks because of the white-hot market. We can complete a review in just a couple of days.)
If the appraisal is equal to or more than your purchase price, and your pre-qualification stands, you’re well on your way to closing. If the appraisal comes in lower than the purchase price, and you can’t negotiate a reduced price with the seller, you may still get a loan—but you’ll have to pay the difference between the appraised home value and the purchase price out of your pocket.
Your Mortgage Stays Local
You may ask: How can Adirondack Regional FCU be more flexible?
Most larger mortgage lenders, after underwriting your loan, turn around and sell the loans to another servicing company or bank. In fact, your loan may be bought and sold multiple times over the life of the mortgage. Each time, you’ll get a letter informing you of the sale, and let you know where to send the payments.
These sales require lenders to follow certain federal guidelines, including ones that cover appraisals.
But when you choose Adirondack Regional FCU as your local mortgage lender, you are assured that your loans stay here. For as long as you have your mortgage, we’ll be your lender. That means we have a little more leeway in how we make loans in the first place. And if you run into some trouble paying the loan—if you’re behind on taxes, say, or if you need to make your payment schedule fit when you get paid—you know you can call us or stop in to talk directly with the mortgage team that approved your initial loan.
Getting a home loan can be confusing, but we’ve helped hundreds of people through the mortgage process. Give us a call or make an appointment to talk to us in person—we’d love to take some of the confusion out of the home buying process.