What You Need to Understand about the Loan Commitment Process

 

As I stated in Laymans Understanding of The Residential Purchase Contract that I am NOT a Real Estate Lawyer, I am also going to state in this portion on t that I am NOT a Mortgage Loan Officer.  However, I know enough of a typical loan commitment process to give you the low down on what happens during this stage of the Purchase Contract. 

*There are several factors that will lead to Title work not being ordered:

  1. The buyer is not truthful about his/her financial situation.  Misleading information is given by the buyer, or all of the truthful facts needed by the lender are not provided.   This can cause the underwriter to reject the application. 
  2. The appraisal does not come in above, or at the purchase price.  If the appraisal comes in lower ($126k) than the purchase price ($128k) then the buyer must either ask for another appraisal or face the possibility of having to put down more money on the home.  Sellers this is a lesson to you too.  Price your home well so financing is obtainable.

A personal thank you to Natalie Moore from First Place Bank for reviewing this blog.  I really appreciate the consultation.