Real Estate Financing - Getting a Home Loan Checklist

When buying a home, getting a home loan is the most important step in the process. You'll need to know the basics to get your real estate financing in place.
First of all, you'll need to find a lender for your real estate financing and potential residential or home investment. You can do this by asking friends, family , co-workers, real estate agents, real estate brokers, real estate professionals and search the Internet for local lenders. Look in your neighborhood.

Try to find a well-established institution; even you can enroll any good online course like https://www.validum.edu.au to improve your real estate knowledge. Be careful about working with mortgage brokers-- they broker loans and work with several institutions. Some are not reliable, and many go out of business when the market dwindles, although your underlying loans should be okay if it is with a reputable institution. Mortgage brokers may come in handy if you need to do some creative or difficult financing or shop for the best interest rate, etc.

Fill out a loan application

Get approximate of closing costs from the lender you've chosen. By law, the lender is needed to provide his statement to you within three days of receiving your loan application. Make sure you know what type of loan program your lender has chosen for you. Get the rates, terms and any special information such as prepayment penalties, etc.If you're working with more than one lender, compare the costs.

You can negotiate fees. Often you can negotiate the amount of the fees or loan points the lender charges you. (A point is 1% of the loan amount. Two points are two percent of the loan amount and so on.)

You can consider lowering your interest rate by paying more points. The more points you pay, the lower the interest rate will be. Think this over carefully before you do this, however. Get advice -it's not the usual way to go.

Provide all the documentation that is required for the loan application as quickly as possible.

Pay any upfront fees required. For example, sometimes the lender will require the appraisal, credit report or processing fee be paid upfront - before the loan is processed.

Review any loan papers. About one week before closing on your property the loan papers will be ready for you to review. Make sure that the loan figures match the original quote you were given.

Have someone you know who is a real estate professional, real estate agent, real estate broker, real estate attorney or any other related real estate expert AND your CPA, go over the papers with you. Also, it's good to know what tax benefits you will have and what taxes you'll have to pay at closing and going forward.

Sign your loan papers and deposit your down payment into your account about three or four days before closing on the property.

You'll need to get a cashier’s check for the down payment to the title company, escrow company or real estate attorney who is handling the closing on the property.

Make sure to do this on a weekday when banks are open. You don't want to lose it so try to time it so you can get the check and take it to the title company but make sure you have allowed enough time for the money to be in your account-- transfers from other accounts can take 24 hours or more. Think ahead. The lending institution will send a check to the title company for the amount of the loan.Now just sign off on all the contingencies - these are called 'subject to's' - and wait for the transaction to close. Then receive a deed and the keys to the property. You are now done. Congratulations! Good work! Real estate financing is easy when you know how to do it! You now are an investor with a great residential investment.

Buy a Home When You Have Bad Credit

If you have poor or bad credit it will make buying a home more difficult but definitely not impossible. Many other home buyers have done it. there are a few options you can think about what it comes to real estate financing.

You can ask the seller to carry the loan. If the seller still owes money on the home you can check with your lender and see if you can get a wrap-around mortgage. The wraparound mortgage will allow you to pay the monthly payment on the existing mortgage and an additional payment to pay the difference-- the balance. Make sure that a wraparound mortgage will not trigger a due-on-sale clause, which requires the loan to be paid off if the home is sold - read the fine print on the contract for the home. Wraparound mortgages are not legal in all states so check this out your real estate laws first.

Consider a lease-option on the property. A lease-option on the real property will allow you to set a good purchase price now, then apply a portion of the rent each month toward your down payment. When the lease period ends, usually anywhere from 12- 36 months but most commonly 12 months, prices on homes should have increased and you'll have accrued equity without actual ownership. At the end of the lease-option period if you don't exercise the option- that means buy the property, then none of the monies that you have paid the seller will be returned to you.

You can ask the seller if he will let you increase the price you are willing to pay the seller and have him credit the money back to you to be used for your down payment or for your closing costs.

As a last resort, you can try borrowing money from your friends, relatives a pension plan or retirement plan to use or the down payment or help with closing costs. be careful, know what you can pay it back within a reasonable period of time.

If you do borrow money for a down payment it must be disclosed to the lender or if any of your money for your down payment was a gift, provide proof for it.If this type of real estate financing appeals to you then you have some good options if you have poor or bad credit and are turned down by the lending institutions.