Before you get any further in the home buying process, you must first obtain your preapproval from a mortgage lender. But what exactly is a preapproval?
A preapproval is a written acknowledgement from a lender that states you are qualified to obtain a home loan for the amount requested. But what many buyers may not understand is there is a real difference between a prequalification and a preapproval. The terms are not interchangeable.
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Whether you are buying a townhouse in Bridgewater, a condo in Montgomery or a home in Somerset county, Central Jersey is the place to buy a home. Through the recession, central jersey has been one the most stable areas in the country for Real Estate. Inventory of Houses for sale in this region is very stable and recently there are some that would say that the market is moving towards a sellers market. Continue reading Market Watch; Home Sales in Central Jersey
An appraisal is an independent report ordered by your lender that supports the sales price of your home. The appraiser makes a physical visit to the property for an inspection, much like the home inspector. And while the appraiser also estimates the current condition of the property the appraiser does so to establish value. The lender must approve the appraisal much in the same manner as you are approved. You can have a preapproval from the lender but the property does not appraise. In this instance, the loan cannot close.
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Perhaps one of the most confusing elements of the lending process is credit scoring. The credit score is often referred to by mortgage lenders and others as the “FICO” score, the acronym for the company that developed the mortgage credit scoring algorithm, Fair Isaacs Company. The credit score is a three digit number ranging from 300 to 850 with the higher numbers indicating better credit.
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Properties must also conform to local municipal code and if any issues are found regarding the current condition of the property or there are outstanding permits on the real estate, those issues must be resolved just as a title report must be cleared. A municipal code requirement is something that needs to be repaired but not just repaired but repaired by a licensed contractor. The city inspector’s office will have a list of any repairs that were made to the property as well as the nature of the repairs. Continue reading Municipal Inspections
An attorney as well as your lender will perform a title search. A title search is a physical review of the title report which outlines any current and previous legal liens in the property. A property cannot change hands unless all existing claims are settled and a title search will highlight any issues. If there are any issues with the title report, your mortgage cannot close.
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