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Home Financing 101

January 24, 2020

Eastwood Homes 10 Step Process to Building a New Home

What’s more nerve wracking then meeting with someone to talk about financing? Chances are they are going to start speaking in terms you don’t understand and that just makes everything worse.

To put your worries aside, we reached out to one of our approved lenders, Lindsey Goins, a Senior Loan Officer with Movement Mortgage to get the inside scoop of everything you need to know for financing your new home. Read her advice below! 

Should I talk to a lender before or after I start my search?  

You should always talk with a lender before starting your home search.  Getting a pre-qualification entails an in depth credit review, analyzing what loan programs best suit your financial needs and reviews the monthly payments and funds needed to close.  The loan officer also gives you buying power or budget so you know what price range you are in when shopping for a new home.

How do I choose a lender?

Choosing a lender is very important because their knowledge is your knowledge when it comes to mortgages and mortgage rates.  Getting a mortgage is very detailed and a good lender can assist you in the process, not just when shopping for a home, but you also want to examine the process after finding your dream home, like how the loan is underwritten and processed is important.

When you build a home with Eastwood, you’ll have the opportunity to work with one of our approved lenders, who we thoroughly trust to take care of you! They know the ins and outs of financing and are trusted partners.

What does a lender do?

A mortgage lender provides financing or cash to purchase a home.  They give you the loan terms, including interest rate, payment, closing costs, prepaid tax and home insurance, term and type of loan for which you qualify. 

The lender is also there to explain the process of getting a mortgage and help you navigate through any issues that may arise when following the underwriting guidelines set by investors.  The lender communicates the stages of the process, from approval to appraisal to fulfilling loan conditions and of course the best part – the Clear to Close – when the loan is final approved.

You can also use our Mortgage Calculator to estimate your mortgage payment based on your down payment, interest rate, and loan term.

What kind of questions do lenders ask? 

  • Name, birth date, social security number, address, phone, and email

  • Questions about employment – income, self-employed, two-year employment history

  • Type of pay – salary, hourly, bonus, commission, part-time, etc.

  • Asset info – bank account balances, 401k, stocks, CDs, IRAs. 

What role does a Loan Officer play throughout the building process? 

If you buy a home that you will be building, we do the initial pre-qualification upfront within 3 days after you write the contract and we gather your documents to submit the loan to the underwriter.  The underwriter is the person that approves or denies a loan – not the loan officer.  After your loan is approved, the underwriter issues loan conditions which is essentially additional paperwork that you supply within 1-3 days allowing the underwriter to clear the conditions.  Then your loan is approved, incubating in the pipeline until we get the closing letter from the builder, which is typically 45 days before closing.  Then we re-pull your credit and you supply updated pay stubs and bank statements.  This is when the appraisal is ordered and you pay the appraisal fee out of pocket.  This is the last stage of processing so once all conditions are cleared, you have final loan approval and the loan goes to the Closing Department to finalize the funds due at closing. Your loan officer is available at any time during the building process but there is some down time on your loan while the home is being constructed.

Why should I choose a builder’s preferred lender? 

The preferred lender of a builder is an invaluable resource to a buyer during the building process because the lender knows who to contact for any question that comes up, and we have a direct line to the closing coordinator to help communicate any buyer’s need around closing. The preferred lender saves the buyer so much time by giving the builder what they need when they need it, and the buyer doesn’t have to be a go-between the builder and lender. If using an outside lender, the buyer is much more involved in getting the lender requirements of the builder.  You also receive closing cost incentive if using a preferred lender.  The preferred lenders are the best of the best in the market and consistently deliver an on-time closing with excellent customer service.

How do I get pre-qualified?

Visit my website at www.lindseygoins.com or you can call me at 704-877-8833.

What’s the different between pre-qualification and pre-approval? 

A pre-qualification is where the loan officer analyzes your credit, income and assets and tells you "yes" or "no" you can buy a home.  

A pre-approval is when all of your information and documents are reviewed by the underwriter, the actual person that can issue a loan approval.  The pre-qual can be given without reviewing the documents so it is not as strong as the pre-approval.

What advice do you have for me while I’m waiting to close?

  • Do not change job roles or employers without talking to your loan officer.

  • Do not have your credit checked for any new debt, loans, credit cards, etc. 

  • Keep your credit card debt paid down – do not max out your credit cards during the home building process.

  • Do not co-sign for any debt during the process. 

  • Do not refinance your auto loan, etc. 

  • No cash deposits – do not deposit cash in the bank – contact your loan officer for how to structure a gift before depositing the money in your account. 

  • Pay all your bills on time.

 

What do you think? Do you feel more comfortable with financing and what is expected of you when you’re ready to buy a home? For more information, feel free to reach out to Lindsey! We’re sure she’ll take great care of you! If you'd like to learn about our easy 10 Step Building Process, click here! It will outline the steps you'll take when purchasing a new Eastwood Home!

If you’re ready to buy a home in North Carolina, South Carolina, Georgia, or Virginia, visit any of our communities today to find your dream home!