LOANS & LENDING
The buyer’s ability to finance the property is an important contingency in most residential transactions. Buyers must act in good faith and use best efforts to obtain a loan if the sale is contingent upon obtaining a loan. Buyers often seek pre-approval from a lender prior to writing an offer. A pre-approval letter should state that the lender has reviewed the buyer’s credit report, income requirement and cash to close and pre-approves the buyer for the loan, subject to an acceptable appraisal of the property.
The appraiser will normally work for the lender, not the buyer. To check the status of an appraiser, visit the Appraiser Certification and Licensure Board: http://oregonaclb.org. Once the appraisal has been received, the underwriter authorizes final loan approval. Only when the underwriting process is completed will an actual loan be secured. The entire financing process normally takes approximately 30-45 days. If the seller is asked to finance any part of the transaction, the buyer’s financial status will become material to the transaction. Any material defect in the buyer’s financial status must be fully disclosed to the seller. Because of the risks involved for the seller, the buyer should anticipate that the seller will fully investigate the buyer’s credit worthiness prior to agreeing to carry financing for the buyer. A real estate licensee cannot hide material information from any party to a real estate transaction and should not be asked to do so by the buyer or seller. Depending on the type of property buyer is purchasing, a seller providing financing may be required to be a licensed mortgage loan originator. Your real estate licensee may not advise whether a seller must be a licensed mortgage loan originator. If applicable, a buyer should consult with an attorney, and visit the Oregon Division of Finances & Corporate Securities by visiting http://www.cbs.state.or.us/dfcs.
A pre-approval letter MUST be your first step before starting you home search. Many buyers will find the house of their dreams only to discover that there is a credit issue and they cannot purchase that particular home. By doing your homework and getting a pre-approval in advance, you will be looking for the appropriate home in the correct price range for your needs.
Some Content taken from the Oregon Property Buyers Advisory http://oregonrealtors.org/resources/membership-resources/buyer-seller-advisories
Working with a Lender
The first step in finding a lender is determining not only the person you will work with but also the type of institution. Home loans are available from several types of lenders the most common being commercial banks, mortgage companies, and credit unions. Each lender has different fees and rates, so you should contact 2 or 3 lenders to make sure you’re getting the best loan for your circumstances. You can also get a home loan through a mortgage broker who arranges transactions rather than lending money directly. A broker’s access to several lenders can mean a wider selection of loan products and terms from which you can choose. There are many options and it is important to find a lender you are comfortable with because you will be giving that person your private financial information. Once you have identified an institution, shop around for the best loan that fits your situation. The most common types of loans are conventional, FHA, VA and USDA. Each type of loan has specific criteria needed for the buyer and property to qualify for the loan.
First-time home buyers should find out from lenders what loan and down-payment assistance programs they offer first-time home buyers. In Coos County the NeighborWorks Umpqua http://www.nwumpqua.org/ has great information and programs for first time buyers including classes to teach you how to go about purchasing you first home.
Please review the following information for help with choosing a lender and loan:
- Applying for a Loan to purchase or Refinance a Home in Oregon visit the Oregon Department of Finance and Corporate Securities (DFCS) http://www.cbs.state.or.us/external/dfcs/index.html
- Looking for the Best Mortgage from HUD http://www.hud.gov/buying/booklet.pdf
Oregon Bay Properties, LLC does not give legal or financial advice. Information provided is not a warranty of any kind and all information should be verified.