What potential issues can cause delays with my loan closing?
Your Loan Officer will set expectations for a closing timeline, which is generally
around 45 days, dependent upon the complexity of your transaction. Follow the
guidelines your Loan Officer provides and be up-front with any changes in your status
in order to minimize the chance for delays.
What is the difference between VA eligibility and loan approval?
An active member of the armed forces or a Veteran of the military may be eligible for
VA benefits. The Department of Veterans Affairs determines eligibility for the VA Loan
program. Loan approval is determined by a lender and primarily based on your income,
debts and credit history. It is possible to be eligible for a VA loan but not approved
for financing and vice versa.
Why do I have to provide additional documents above and beyond those submitted to get pre-approved?
A pre-approval is made official by reviewing income, asset and credit documents. Your
Loan Officer will communicate what you should expect to need throughout the process.
However, in order to receive final loan approval, specifically once a contract is
signed, an underwriter will typically ask for supplemental information. Requests
for updated income and asset documents, borrower letters of explanation, or any
number of items related to the specific property are common and should be expected.
What can I do if my appraisal comes in low?
A lender cannot finance a loan above what a real estate appraiser determines the value
to be. Often a seller will lower their sales price to match the appraised value but it
is possible to file an appeal with the VA in the event of a low appraisal. This method
does not commonly lead to a significant change of the original appraised value. As a
buyer, you also have the right to pay the difference beyond the appraisal value,
negotiate with the seller, or walk away from the property.
What's the difference between prequalification and pre-approval?
Becoming prequalified for a loan is a basic step the applicant can complete in a
conversation with a Loan Officer, as documents are not required to be submitted
at this time. Prequalification gives you a ballpark estimate of your purchasing
power while pre-approval is a more formal stage of the process in which you provide,
on paper, confirmation of the information translated at prequalification. A real
estate agent will generally require a pre-approval letter before a purchase offer
can be made.
What is the difference between closing costs and a down payment?
The money a buyer puts toward down payment goes toward equity (the portion of the
home's value that you own) while closing costs cover fees and services for the work
performed by the lender, title agent, and to establish tax and insurance escrows.
The seller may cover some or all of these costs, or they become the responsibility
of the buyer. Your lender will estimate closing costs for you; however, exact numbers
are usually not determined until final loan approval, just before settlement.
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