The Financing Process
Step One:
Speak with a Lender
Similar to a traditional home buying process; before you start looking for a property to buy, it’s wise and proactive to meet with a lender to get pre-approved for a loan amount if its a residential property (1-4 units) or discuss what type of real estate investment you are looking for if requiring a commercial loan. Offers on a residential income property accompanied by a pre-approval letter are stronger and will stand out, especially when the seller is receiving multiple offers.
To gain pre-approval for a residential income property, your preferred lender will gather information about your income, assets, and debts to help determine how much you can borrow. This can include gathering a credit report, W-2 forms, pay stubs, federal tax returns, and recent bank statements. For commercial purchases, the lender will need to review the financials of the prospective property to see what kind of mortgage it can support and potentially your information as well.
There are a variety of residential and commercial loan products offering advantages depending on your unique needs and preferences. Each lender is different and able to offer a variety of products depending on the property of interest, so it's encouraged to consult with more than one. Your preferred lender can go over the specifics of each to ensure you find a loan option that best aligns with your needs.
Estimate Your Monthly Payment & Expenses
Estimate your mortgage payment, including the principal and interest, taxes, insurance, and management or HOA fee.
Price
Annual Tax
Loan Term (Years)
Down Payment %
Interest Rate %
Monthly Management or HOA
Monthly Insurance
$3,198.20
Estimated Monthly Payment
Principal
$2,398.20
(75.0%)Taxes
$500.00
(15.6%)MGMT or HOA
$100.00
(3.1%)Insurance
$200.00
(6.3%)Step Two:
Find the best loan
Collaborating with a top-notch local loan officer will ensure you have access to competitive rates and programs that best fit your individual needs. Take the first step by completing this form to get connected today!
Step Three:
Application and Processing
When you find the perfect property and your offer is accepted, your lender will help you complete a full mortgage loan application, discuss down payment options, and explain any related fees.
Then, your application is submitted for processing where the documents are reviewed. Your lender will also order an appraisal and a property title search.
The next part of the application process involves sending everything to an underwriter who will review and approve the entire loan package to make sure it meets all compliance regulations.
It is not unusual to receive requests for additional documentation or clarification during this phase of the application process.
Step Four:
Signing and Finalizing the deal
Once your loan is approved, you’ll need to set up your insurance.
Your documents will be sent to the title company and the closing will be scheduled for you to sign the necessary paperwork and pay any additional costs to complete the purchase of your new property.
After the loan goes through the required recording process, the purchase is complete, and you officially own your new property!
