![]() If there’s something that affects how much money you have on hand that isn’t shown by simply looking at your salary, be prepared to document it. This includes but is not limited to marriage licenses, divorce settlements, child support, liens, bankruptcies, or judgments. Any other disclosures that are material to a borrower’s financial situation.The number of pay stubs varies by situation. Recent pay stubs and contact information for each borrower’s employer.Up to two years of tax returns, released to the lender via an authorization submitted by the buyer using IRS form 4506-T.This can also include documentation of rent payments. Several months of statements for any outstanding loans, lines of credit, or other liabilities.Several months of statements for each bank account a borrower holds (including any investment accounts).These vary by situation, but the most commonly requested documents are: The buyer sends a series of personal financial disclosures to the lender.The final costs are likely to deviate from this estimate. The lender sends a “Good Faith Estimate,” or GFE, to the buyer that is a breakdown of estimated closing costs.Of course, well before this point, a pre-qualification or pre-approval with a lender should have been acquired. See a sample Uniform Residential Loan Application used in Nevada. A buyer submits a loan application to their lender, either directly or through a mortgage broker.The following is the general process in Nevada: It’s best to start as early as possible and be ready to produce lots of documentation. ![]() ‘home protection plan’) that covers major appliances from failure for a time period after the sale, typically a year.įor those borrowing to purchase their home, the mortgage process is usually the most stressful and opaque part of the transaction. The buyer may also negotiate for a home warranty (a.k.a.Sellers may also insist in advance on a ‘limit of liability’ and put a maximum dollar amount they’re willing to pay for any repairs or certifications due to defects found during inspections. In this case, the due diligence period automatically extends by the number of days it takes the seller to respond to the buyer’s request to repair the defects (or some other arrangement, like closing cost credits. If the buyer finds anything objectionable during inspections, they can report these defects to the seller and terminate the contract, or they can ask the seller to remedy the defects they found.A property survey may also be performed during due diligence. In Nevada, common inspections include an initial inspection by a licensed home inspector and additionally a termite inspection. The buyer can terminate the contract and recoup their earnest money deposit at their sole discretion during this period. Buyers are expected to use the due diligence period (which expires a number of calendar days after acceptance) to perform inspections on the property and check out other factors that might influence their happiness there (schools, neighborhood, etc.).Though it’s required by law, sellers may also see this as beneficial to themselves, and believe that buyers will build these pre-disclosed facts into the contract price (and thus sellers may be reluctant to provide any credits for these defects). In Nevada, a mandatory form called a seller’s real property disclosure form is provided by the seller. ![]() These disclosures vary based on property type but often include things like known flaws with the property, prior improvements or repairs, and potential environmental hazards. The buyer reviews and signs off on any disclosures, usually attached in a standard form as an addendum to the purchase contract.Escrow companies are often part of a title company but work as separate divisions. A deposit, called earnest money, is deposited with the seller’s real estate brokerage, an escrow agent, or an attorney depending on the contract (never to the seller directly).An offer is accepted by the seller and a contract is signed.These are the initial tasks once a buyer is in contract, and are most often done in parallel to Part 2: The mortgage process: ![]() Start Your Free Trial Step by Step Part 1: Disclosures, due diligence (inspections), and credits ![]()
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