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Chase Home Loan Pre Approval – Getting a pre-approved letter of credit is like getting a college acceptance letter or a job offer letter. It’s wonderful to have someone who likes and trusts you enough to welcome you into their community. Obtaining a letter of credit prior to approval is also very helpful as the pre-approval process often takes 2-5 weeks.
But just like college or work, the hard part starts when you learn it. Once you’re pre-approved, you need to find a home, make an offer, get an offer, review any contingencies, sign all the paperwork, and actually be happy with getting a mortgage.
Chase Home Loan Pre Approval
Let me tell you what a pre-approval letter looks like after I write about how to get pre-approved. Then I’ll share with you what happens next. In a hot real estate market, getting a pre-approval letter is essential.
Steps On The Journey To Purchasing Your Dream Home!
After three weeks of providing endless documentation to the lender who refinanced my previous mortgage, I finally received an encrypted email from them with the next pre-approval letter of credit.
The pre-approval mortgage amount is $1,700,000 with a target purchase price of $2,800,000. The deposit amount is $1,100,000, creating a loan-to-value ratio of 60.71% ($1.1 million/$2.8 million). ). The loan type is a 7/1 ARM, my favorite type of mortgage, at an incredibly low 2.125%.
I used to only get the 5/1 ARM because the 5/1 ARM offered the lowest interest rate with the most comfortable fixed rate length.
However, in recent years the 7/1 ARM has become even more attractive. This is due to a flattening or inversion of the yield curve. Not only do you get two more years of a fixed rate, but you pay a lower mortgage rate compared to a 5/1 ARM or a 30-year fixed rate mortgage.
Pre Qualified Vs. Pre Approved: What’s The Difference?
The monthly payment for a $1,700,000 mortgage at 2.125% is a low $6,390.33. For some perspective, when I bought my first single family home in 2005 for $1,525,000, I took out a 5/1 ARM mortgage for $1,225,000 at 4.75%. My monthly mortgage payment was also $6390. It’s amazing how over 15 years later, because of lower mortgage rates, I can borrow $500,000 more on the same amount.
Over that 15+ year period, most of us have seen our incomes and/or net worth grow tremendously. Therefore, the combination of larger assets, more equity and lower mortgage rates are important factors in boosting the real estate market in these uncertain times.
Note that relationship costs contribute to the 2.125% mortgage rate. I have funds with a lender that qualifies me for their highest discount rate. But even if you can’t get 2.125%, you can probably still get 2.5%-2.625% on a large 7/1 ARM loan that’s very cheap.
You may be wondering if you should apply for pre-approval based on a specific mortgage amount or if you should apply based on the price of the home you want to buy. You can go one way or the other, because in the end both paths lead to the same destination. In other words, the bank ultimately decides how much you can get pre-approved.
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Generally, people search for the homes they want to buy based on their price range. The price range is determined based on income and down payment. From there, the prospective home buyer will provide the mortgage officer with the appropriate information to proceed with the process.
In my situation, a house popped up online that I thought looked amazing. The asking price was $2.9 million, which I thought was a bit excessive. I wasn’t comfortable paying more than $2.8 million, so I gave the lender $2.8 million for the target sales price.
It was a gamble because there was no guarantee that the seller would sell for $100,000 below their asking price. If the seller hadn’t budged and really wanted the property, he would have had to pay $1.2 million instead of $1.1 million. But I had to decide on the price that suited me best. All of you should do this too. If I lost my property, so be it. There will always be another great property for sale.
Now that I have my pre-approval letter, I realized that I should be applying for an even larger amount of pre-approval credit, especially now that credit is getting harder to secure. This is because it is much easier to borrow less than you are pre-approved than it is to borrow more.
Chase Bank Near Me: Closest Branch Locations And Atms
I am currently limited to buying properties valued at $1,700,000 (pre-approved mortgage amount) + as much as I can put down. If I wanted to enjoy a high-end luxury property that might show more weakness, I can’t because I don’t have the funds.
Multiple credits will take another 2-5 weeks to go through the new revised pre-approval process.
As a seller, unless you are desperate, you should only deal with pre-approved leads. Otherwise, there is a much greater chance that the deal will be delayed or fall into the water due to financing.
When I tried to sell my single-family home in 2017, the buyer put the financing on hold for two weeks because his lender was having trouble transferring the work. It was a very stressful process as he was my only customer.
Reasons Not To Get A Mortgage Through Chase: A Review
In times of uncertainty, lenders tighten their lending standards to protect their businesses. For example, Wells Fargo and Chase have said they will only accept home buyers with 20%+ down and a 700+ credit score. Many potential buyers who only pre-qualify can be very disappointed when it comes time to actually get financing.
This credit approval is based on the mortgage product and current conditions. Credit approval is not a commitment
A loan is made and is subject to modification or cancellation if: the loan no longer meets applicable regulatory requirements; and/or there are material changes as a result of receiving updated information that would cause your loan application to not meet our underwriting requirements; and/or there are changes in mortgage requirements beyond our control, such as changes introduced by investors, government agencies or mortgage insurers.
In other words, regardless of pre-approval, the borrower will still need to be in good standing. The borrower will have to submit all the relevant required further documentation.
Chase Pre Approval In Chase Credit Journey.
While you spend an average of 2-5 weeks gathering documents, explaining financial transactions, collecting additional documents and waiting, your letter only takes a certain amount of time before approval.
On average, you have 30-45 days to use it before your pre-approval letter expires. After 30-45 days, your lender will begin requesting financial documentation from the past two months to prove your creditworthiness.
If your income and financial situation have not changed, you should have no problem getting pre-approved again. It will only take time to collect and send the latest documentation. For 30-45 days, be careful not to do anything drastic with work or finances.
Changing jobs, quitting your job, buying a car with debt, going to Vegas to gamble all your money on the black, and forgetting to pay your credit card bill are all signs that your pre-approval process could be in jeopardy.
Chase Mortgage Application
When you receive your pre-approval letter, package it with your real estate love letter when you submit your offer. The extra effort can help because many customers don’t.
You may be wondering whether or not you can lower the estimated sales price in the pre-approval letter. Sometimes you may have to make a lower offer after signing the contract. For example, I didn’t want the seller to see the estimated sales price of $2,800,000 in my pre-approval letter when I only intended to offer $2,700,000. Unfortunately, my lender said they could not change the estimated sale. Price in the letter. He will have to go back and get the insurance again.
As I said at the beginning of this article, the real work begins when you receive your letter of credit before approval. Hopefully, you will be pre-approved before you find your ideal property.
When it comes to buying real estate, take your time. You only have a limited amount of credit. Make the most of it!
Bed House To Rent In Chase Valley Heights
If you’re looking to refinance your mortgage or buy a new property with a mortgage, check out Credible. Credible is the leading loan marketplace where lenders compete for your business. Get free real quotes in minutes. Mortgage interest rates are the lowest in history. Take advantage!
Also, explore real estate investment opportunities given record low mortgage rates. Fundrise and CrowdStreet are my favorite real estate marketplaces that allow you to invest in real estate across the country.
Fundrise focuses on private eREITs that provide investors with stable and diversified exposure to real estate. CrowdStreet focuses on individual commercial real estate transactions in 18-hour cities. Appraisals are cheaper and rent is income
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