Here is a quick overview for those of you embarking upon an exciting decision in your life! As always, if you have any questions, don’t hesitate to ask!
1. The most important step is the first step: KNOW YOUR NUMBERS AND FINANCE. In order to know how much loan you can be approved, what is your monthly payment and how much do you need upfront, you will need to speak to a RMLO, or Residential Mortgage Loan Officer.
You should know how much is needed for down payment and estimated closing cost and should have it available before you start search for a home. With an experienced loan officer, you will have all the questions answered and know for a fact you can start working with a Realtor to look for a house within your expectations and qualifications.
You will receive a PRE-QUALIFIED OR PRE-APPROVED letter that you should present to the Realtor. Make sure to work with a loan officer that will explain to you about qualifying different types of mortgage, amount needed to complete the purchase and what you need to improve on to get the finance you are happy with. This is important and should be done upfront in the home-buying process.
2. Once you are PRE-QUALIFIED OR PRE-APPROVED, communicate with your Realtor. Be open minded on what is available on the market within the budget you are approved for.
Have your Earnest money and Option Fee ready to make an offer once you see a home you are ready to buy. Earnest money usually runs about 1% of the purchase price and will be credit back to you at closing towards your down payment.
The Option fee usually runs anywhere from $100 to $200. This allows the seller to hold the house for you while you have your inspection done. Option fee will also credit towards your fund needed at closing if elected so on contract.
3. While you are looking for a home to put into contract to purchase, it is imperative you go head and submit all your financials to your loan officer. Just because you are pre-qualified does not constitute a underwriting approval.
A GOOD LOAN OFFICER will review the following: 2 year employment history, pay stubs for last 30 days, W2 and tax returns for last 2 years, and asset for the fund needed at closing of the sale. The earlier a loan officer can evaluate your finance, the earlier the loan officer and guide you through the process better. This will eliminate any underwriting issues and prevent any problems while you are under contract.
WHY is that important? Well, since you have to put earnest money down, pay for inspection and appraisal, wouldn’t it be prudent to make sure your loan will be approved to close at the end?
If you don’t have a loan officer that will help review your finance prior to underwriting, contact me so we can find an experienced loan officer that will.
4. Once your contract has been accepted by seller, Please make sure to schedule your inspection AS SOON AS POSSIBLE. There are no PERFECT homes out there. Every house will have some kind of deficiencies or repairs. Even a brand new house will have adjustments that are necessary.
It is important to know what these deficiencies are and what you can expect down the road of owning the home you are purchasing. You will typically have about 7 days to have the house inspected and for any repairs will need to be negotiated. The cost of inspection can range from $375 to $550 depending on the size, area, and type of inspection.
5. Once your contract repairs are negotiated and option period is over, then your mortgage company will request your authorization to order the appraisal. The appraisal report confirms that the sales price meets the requirement for underwriting to approve your loan as well as making sure the property’s physical condition meets the minimum HUD standards of articles 4000.1.
6. After the appraisal comes in and you have received a fully approved loan from underwriting, then you are going to Closing Phase. You will receive Closing Disclosures three business days (Including Saturday) prior to close.
It is important to review it and go over it with your loan officer and Realtor to make sure all the numbers are in right places.
7. Have your fund ready to wire to the title company or have a cashier’s check ready payable to the title company where you are closing. Some title companies now require wire only, so it is best to call the title company and find out. The Lender will require you to use the funds from an account that you have verified with underwriting.
8. About 1 to 2 days prior to closing, you should schedule a final walk through with your Realtor. This way you can ensure the property is in the condition of your expectation prior to close and take possession of the house.
9. CONGRATULATIONS!! Once you close within couple hours your loan should be funded and you should be able to pick up the keys for your new home! Don’t forget this a TEAM effort.
If you are satisfied with my services and your Loan Officer, please leave us a good review and refer your friends and family.
I am sure your friends and family would love to have the same satisfying services you received, especially comes to purchase the biggest investment in their life times.