The law offices of Hoy Sahlas LLC

Shopping for a Mortgage?

Below is a general guideline and helpful tips when applying for a real estate mortgage in Illinois.

By Colleen L. Sahlas, Attorney

KNOW BEFORE YOU GO.  Before you apply for a loan you should obtain a copy of your credit report and correct any wrong or missing information:

BEWARE OF PREDATORY LENDERS.  Learn to read the warning signs:

CAN YOU AFFORD IT?  Find out how much house you can afford:

KNOW WHO YOU’RE DEALING WITH.

EDUCATE YOURSELF about mortgage terms and types of loans. 

SHOP AROUND for a mortgage broker or lender.  Meet with several lenders and mortgage brokers before you commit to a specific one.

ASK YOUR LENDER FOR A PRE-APPROVAL LETTER. 

  • Don’t confuse a pre-qualification letter with a pre-approval letter.  Unlike a pre-qualification letter, a pre-approval letter means that the loan officer or mortgage broker reviewed your credit report.  When presented with your offer to buy a home, a pre-approval letter can assure the Seller that you are a good candidate for loan approval of a specific amount and can stand above a competing buyer’s offer which lacks a pre-approval letter.  
  • To learn more, visit the Mortgage Professor’s website.

ASK YOUR LENDER FOR A “LOAN ESTIMATE.” 

  • A loan estimate provides estimated charges which you are likely to incur upon the settlement of your loan (at your real estate purchase closing).  Federal law requires lenders provide it to you within 72 hours after you submit your loan application. 
  • A sample can be viewed at the website of the Consumer Financial Protection Bureau.

A PRE-APPROVAL LETTER IS NOT A FINAL LOAN APPROVAL. 

  • Even with a pre-approval letter, your loan application process has just begun. 
  • Your lender usually needs:
    • a copy of your real estate purchase contract;
    • to lock your interest rate;
    • to appraise the property;
    • information such as your bank statements, your assets, your securities, any real estate properties you may own, your income, your income taxes, verification of employment, etc.;
    • an inspection of the property (not always);
    • final approval from the lending institution’s underwriter(s).

MISTAKES TO AVOID

Read the various articles of common mistakes to avoid when shopping for a house and mortgage at the Mortgage Professor’s website.

 

Read about the legal services that the Illinois real estate attorneys at The Law Offices of Hoy & Sahlas, LLC can provide to you if you are buying real estate in Illinois.  Hire us by calling (630) 575-0400 or by filling out our form online.

* Disclaimer: This is intended to be a general guideline and is not a comprehensive explanation.  Do not rely solely on this information. To obtain the most comprehensive, accurate information, seek counsel from a professional or expert in the area, the Illinois Attorney General’s Office, and several licensed mortgage brokers or loan officers. If you have questions about the application of the law in a particular case, consult a lawyer. The law is constantly changing. Information on this site or any site to which we link does not constitute legal advice.