Buying a home in Nashville? You’ll need a competitive edge
April 18, 2016
Kevin Watson, Guest Blogger
According to Zillow, Nashville was recently recognized as the nation’s fifth-best seller’s market. While this is good news for sellers, it creates a more competitive purchase market for local buyers. Thankfully, there are some things a prospective homebuyers can and should do to increase their likeliness of becoming the eventual homeowner – not the runner-up:
1.Get Prequalified: A lender can help you determine a general qualification range and multiple loan options based on your debt, income, desired monthly payments and other factors. This can be completed over the phone or in person and can take as little as 30 minutes. The lender should also provide you with a total cost analysis of a few scenarios so that the financial impact of each different mortgage over the next five years, as well as over the life of the entire loan, is clear. If you’re currently renting, the lender should perform a cost analysis of the lease versus a home purchase to see which option is less expensive over time.
2.Get Preapproved: In this phase, the lender needs your authorization to verify personal financial information to ensure that you legally qualify for the amount determined in the prequalification phase. This includes a review of important financial documents, such as a W-2, pay stubs, bank statements and tax returns. An application for a loan will need to be completed (via phone, online or in person). If the application and financial documentation are successfully processed, then you will be preapproved.
3.Get a Conditional Approval Letter: Following preapproval, the lender will process your loan with an underwriter, who will make the final decision on lending the money. If everything checks out, a loan will be issued with certain conditions. If the home you wish to purchase satisfies the conditions of the loan, the lender can issue an approval letter, essentially stating their commitment to lend you the full amount.
From the seller’s perspective, working with a prospective homebuyer with a conditionally approved loan all but guarantees a quick and seamless sale. In fact, some home sales have halted because the borrower was approved for the purchase amount, but the home did not satisfy the conditions of the loan. By working with a trusted lender to complete these three phases, prospective borrowers can ensure a stress-free experience on their path to owning a home.
Kevin Watson is district manager of Middle Tennessee for Churchill Mortgage.
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