10 Steps to Homeownership.
We understand that buying a home can be a very overwhelming time in your life and that's why we want to share with you these 10 steps to homeownership to simplify the process. If you have any questions regarding this process, please don't hesitate to call us!
1) Pre-Qualification - The first step for all purchase transactions. It’s a good idea to get pre-qualification before you start looking at houses, that way you’ll know what you can afford. During the pre-qualification process, we gather information about your income, job history, residency, liquid assets, credit scores and make a financial determination about how much house you may be able to afford. We’ll send you out your pre-qualification letter in the mail along with a list of documents that we would need in order to submit your loan application to a bank. It’s important to start putting together the list of documents right away!
2) House Hunting - This is the fun part! Now that you know how much money the banks will approve you for and have a better idea of what type of monthly payment you will be required to pay, you can start going out and looking at different properties. It’s always a good idea to hire your own buyer’s agent. A buyer’s agent does not cost you anything, and is working in your best interest. The seller of the home that you may be interested in buying pays their agent who in turn will pay your buyer’s agent.
3) Writing an Offer to Purchase - You’ve found the house of your dreams and your buyer’s agent will now help you write up an offer to purchase. You’ll typically need to attach your pre-approval letter and a deposit check to show that you have full intentions of buying this property; usually $500-$2000.
4) Home Inspection - In the offer, there should be a home inspection contingency, you will usually have 7-10 days to have a home inspection completed. A home inspection costs anywhere from $200-$500. It is very important to have a home inspection done, because it will point out any problems with the house, if any. If during your home inspection, the inspector finds any major problems, you can still back out of the deal and get your deposit money back. Feel free to call us for a recommended home inspector.
5) Application/Processing - Once you have a house picked out and your offer to purchase has been accepted, it’s time to actually apply for a mortgage. Hopefully by now, you’ve organized all of the documents I requested when I pre-approved you. Various fees and down payments are discussed at this time and you’ll receive a Good Faith Estimate (GFE) within three days that itemizes the rates and associated costs for obtaining the loan. After you’ve decided on the program the suits you the best, we’ll get you locked into a rate. Rate locks are typically 30 days, but if you are closing quickly we can lock for 21 or 15 days, which may offer a lower interest rate; if your closing isn’t going to happen for a while, we can lock you in for 45 or 60 days, with a higher interest rate. As soon as we receive all of the requested documents and we have a program and rate picked out for you, we’ll submit you loan file to the bank for underwriting.
6) Underwriting/Approval - The underwriter is responsible for determining whether the loan application package that we submitted is deemed as an acceptable loan. If everything looks good to the underwriter, then he/she will approve your loan and send us a list of outstanding documents that they will need before issuing your commitment letter. Most banks will approve a loan within 1-2 business days depending on how busy or slow they are. On a typical loan approval, the underwriter may ask for documents such as the appraisal, fully signed P&S, title work, missing income/asset documents, etc…
7) Purchase & Sals Agreement - Purchase and Sales Agreement After your attorney reviews the purchase and sales agreement both you and the seller will sign it and send it to us! At this time you’ll submit your second and last deposit check to the seller’s real estate agent.
8) Pre-Closing - We’ll let you know as soon as your loan is approved and send you the list of remaining documents that we will need before your loan is cleared to close. Once we meet all of the approval contingencies, if any, we’ll schedule your closing time. You’ll need to get a bank check addressed to yourself once we get you the final dollar amount of what you’ll need to bring to the closing. You can expect the final numbers a few days before your closing is scheduled.
9) Final Walkthrough - The walkthrough usually happens the day of or the night before the closing, your buyer’s agent will take you to the house and go through everything to make sure it is in a condition that was agreed upon in your original offer to purchase.
10) Closing - At the closing, the lender "funds" the loan with a bank wire to the selling party in exchange for the title to the property. This is the last step of the loan process. You’ll receive the keys from the seller(s) now and congratulations, you’re a homeowner.
