homeowners, contingent upon the sale of their home. Having as strong pre-approval or a Mortgage TBD commitment (Property is To Be Determined) is the way to avoid having financing sink your deal. Appraisals below the purchase price can jeopardize a deal. When this happens, it affects the loan-to-value (LTV) ratio. For example, if you agreed to buy a home for $600,000 with a 20% down payment ($120,000), your loan would be $480,000. But if the home appraises at $580,000, the lender will only finance 80% of that—$464,000. You’ll either need to renegotiate the price or cover the $16,000 shortfall yourself.
STEP 10: PUT MONEY IN ESCR Y IN ESCROW
Part of the home-buying process involves putting money into escrow; the buyer is expected to put an initial deposit (also known as "earnest" money) into escrow in order to make the contract binding, which then helps the contract move through and toward closure. Essentially escrow refers to a time period, not a place. Escrow is the period between 1) the time an offer of purchase is made on a property; and 2) the time when that property’s title is officially transferred from seller to the new owner. The escrow process is essential in cases in which the ownership of title will be changed. The money put into escrow, or the initial deposit amount collected as part of escrow, is considered as “earnest” money. How much money are you, the buyer, supposed to put into escrow? This is determined indivivually on the terms as stipulated in the offer of purchase. An escrow agent or the seller's attorney who specializes in this period and process will be involved. The agent serves as a third
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