Qualify with Lender

During: Buying Process Overview: Pre-Showings: Qualify with Lender

Qualify with Lender is all about lining up your financing for your next purchase. You can skip this step if you're paying cash for your property, but you'll want to be prepared with proof of funds instead. It is the first step in the Pre-Showings process.

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The Qualify with Lender process is shown below.

Ask Real Estate Broker for list of possible Lenders

Ask your Real Estate Broker to suggest 3 possible Lenders to contact for financing your home purchase based on the types of loans you're considering.

You're welcome to use whichever Lender you choose (from the Real Estate Broker's recommendations or your own), however... you should realize that making sure your Lender performs if your responsibility.

In other words, if your Lender does not show up on the day of closing with the money for whatever reason, you are still in default on the "Contract to Buy and Sell Real Estate" (not your Lender) and you are at risk of losing your Earnest Money (and specific performance in the unlikely event that box is checked on the "Contract to Buy and Sell Real Estate"). Another way of saying this is: your Lender is not a party to the "Contract to Buy and Sell Real Estate" and so they have no consequences in the "Contract to Buy and Sell Real Estate" if they don't perform.

So, consider "testing" a new Lender carefully.

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Interview 3 Lenders

Talk to 3 Lenders to determine which one you'd like to use.

Ask your Real Estate Broker for recommendations.

You may want to consider at least reading through the Mortgage Broker Interview Questions for some ideas of what you might want to ask:

https://JamesOrr.com/mortgage-broker-interview-questions/

Mark complete once you've talked to 3 Lenders of if you've already decided which Lender you plan to use.

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Determine your Lender

Decide which Lender you will use to finance your purchase.

You can ask your Real Estate Broker for recommendations.

Mark this task complete once you've decided on a Lender to use.

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Apply for loan with Lender

Make an application to get qualified for a loan with the Lender you've decided you're going to use.

Some people will opt to get quotes from multiple lenders. If you're going to do this, compare everyone on the same day so the rate is the same.

Also, have the Lender you think is most likely to be the one you'll go with pull your credit and then tell the other Lenders you're comparing what your credit score is. If you decide to go with them, you'll let them pull your credit then.

Your ultimate goal at this point is to get a pre-approval letter for the max amount you qualify for.

If you need a recommendation for a Lender ask your Real Estate Broker.

Mark this task complete once you've applied for a loan and been approved with the Lender you plan to use.

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Understand what documents your Lender will need

Understand what documents your lender will ultimately need to do your loan and start gathering and preparing those documents.

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Find out what interest rate and down payment amount you'll likely get

Find out what interest rate and what down payment amount you'll likely get when you get your loan.

You'll want to use this when you start to analyze properties using Brian's Spreadsheet.

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IF OWNER OCCUPANT: Find out your estimated monthly payments

If you're going to owner occupy the property especially, find what your estimated monthly payment will be for both your max loan that you can qualify for and the price you're comfortable with that you'll likely be buying at.

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Once you've qualified with your lender, you can move on to getting a Pre-Approval Letter.

Improvements

The following are improvements I plan to make to this page based on some of my Standard Process Improvement Questions.

  • Consider making dynamic process charts.

  1. Sponsor Read "Facebook Ads for Real Estate Agent and Lender Sponsors"
  2. Sponsor Read "100 Ways to Get a Nomad Client in the Next 12 Months"
  3. Sponsor Read "Prepare for Investor Meeting Checklist"
  4. Sponsor Read "At Investor Meeting Checklist"
  5. Sponsor Read "Before for Real Estate Agents"
  6. Sponsor Read "During for Real Estate Agents"
  7. Sponsor Read "After for Real Estate Agents"
  8. Sponsor Read "Lease Option Ad for Property Listed in MLS for Clients"
  9. Sponsor Read "Standard Process Improvement Questions"

IMPORTANT NOTE: This checklist is based on what I personally use with clients in Northern Colorado. Please rely on your local real estate agent for how it works in your local real estate market. This process will definitely vary in different States.

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