- the Dangers
- Buyer's Broker
- The Process
Apply for a Mortgage
Choosing a Lender
There are many types of lenders -- banks, credit unions, and mortgage brokers, to name a few. They each offer advantages and disadvantages, but they all have one thing in common -- a lot of fine print. Do yourself a favor -- let your buyer's broker help you choose the lender who is truly offering you the best deal.
After you choose a lender, you need to apply. This involves filling out an application form and paying an application fee and an appraisal fee.
The lender then reviews your application. They do a credit check. They verify your employment, salary and assets.
They'll also evaluate the property. This is known as an appraisal.
The appraisal, like the CMA, but is done by a licenced real estate appraiser.
The appraiser determines value primarily through a cost analysis and a sales comparison. The cost analysis determines what it would cost to build a similar house. The sales comparison involves comparing the subject property to at least three similar ones -- "comps." These comps are properties:
(1) Similar in style, square footage, number of bedrooms and bathrooms, age and other characteristics;
(2) In close proximity to the subject property;
(3) That sold in the last six months.
The appraiser takes data from the comps and makes adjustments, as no two houses are exactly alike, in order to arrive at a final value estimate. This will determine the amount available for the mortgage.