There are four things that every first time home buyer in Colorado should know. The first of these has to do with Loan Contigency. Loan contingency is the period of time the seller is giving you to obtain full, formal loan approval. This contingency is normally between 15 and 21 days depending on what you and your Real Estate Agent have negotiated on your behalf in the contract. The earnest money deposit that you set into an escrow account at the time the offer is accepted will be put in jeopardy once that contingency for the loan has expired. In fact, pursuant to the terms of the contract, if the loan contingency has expired and you do not close the purchase transaction, you can lose your earnest money deposit. For this reason it is extremely imperative to make sure you are not agreeing to a loan contingency in an offer negotiation unless you are absolutely positive you will be buying the home and you know you do not need to depend on financing approval to close the transaction. Formal pre-approval will help to eliminate any issues in this area.
Seeking complete pre-approval for financing prior to making an offer on a property is the perfect strategy for any home buyer in Colorado that can help you acquire the best deal possible, especially if you plan to make minimal down payment. The seller is often wary of the stability and reliability of the buyer if the buyer is only capable of making a down payment of 10% or less. This can cause the buyer to forfeit a significant amount of negotiating ability, by being perceived as soft buyer rather than a strong one. This is why it is very crucial to get full loan approval in advance and provide a written confirmation of the loan approval when an offer is turned in. This shows it is a done deal, and you are perceived to be a cash buyer.
The contract period is the duration of time in which all due diligence must be completed, including receiving loan approval, property appraisal, home inspection reports, termite inspection, etc. Give yourself enough time for all necessary items to be completed for this very important purchase you are about to make. Typically, purchase contracts are created for a period of 30 days, 45 days or 60 days. However, it is really not uncommon for a purchase contract to be written with terms greater than 60 days if the parties involved require that long of a grace period to complete all aspects of the necessary items.
As part of the negotiation in your purchase contract, you and the seller will mutually agree upon the amount of time called for to complete all the home inspection procedures that are required. Utilizing an outside third party service to complete these inspections is highly suggested, especially for a first home buyer in Colorado. You will be provided with a report by the home inspection company that you should examine very thoroughly to make sure there are no material flaws in the property that you were not aware of, and which could subsequently have an impact on the value of the property. If there are material defects, you and your Real Estate Agent should return to the negotiating table and discuss a decent reduction in the purchase price to offset the cost of any necessary repairs. Once your home inspection contingency has ended, you no longer have the leverage to go back and renegotiate the purchase price to resolve any issues revealed by the home inspection.
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It's true - qualifying for a mortgage is something that is definitely not taught in schools (or even college). Most people think of the bank giving us a mortgage But that idea is not always the case.
Be Sure To Get Your Next Mortgage Loan From A Home Loan Broker For A Great Borrowing Experience
It's true - qualifying for a mortgage is something that is definitely not taught in schools. Most people think the bank is giving us with a mortgage.
