The Pre-Game - Get Pre-Approved
Buying a home, it’s as American as apple pie. It’s that one common dream, that common goal that most of us strive for. Having your own safe and cozy place to call your own – there’s nothing better. But just like most goals, a successful outcome can depend on a little training, good preparation and maybe even an experienced guide.
Buying a home is no different and, unless you’re sitting on a pile of money, it starts with talking to a great, local mortgage broker who can help you plan, set your budget and determine the best mortgage program to suit your needs. There’s a word for all of this and it’s “pre-approved.”
You absolutely need to be pre-approved before you start making offers on potential dream homes.
Getting pre-approved is simple! It requires that you have a conversation about your housing goals with your mortgage broker, complete a loan application and have your credit checked. With that information, your mortgage broker can determine whether you’re qualified and craft a pre-approval based on your credit score, income and the funds you have available for a down payment. Being pre-approved will determine your loan program, maximum purchase price, an estimated monthly mortgage payment and how much money you’ll need for your down payment and closing costs.
Now it’s time to go shopping!
“Home Owners Are Happier and Healthier!”
– NATIONAL ASSOCIATION OF REALTORS®
It’s a Team Sport – Finding Your Dream Home
Now that your budget is set, and you know what you can afford, it’s time to start your home search. The easiest and smartest way to do this is with the help of a licensed real estate agent. If you need help finding a qualified agent, we can help. We work with some of the best in the industry.
Your agent plays a huge role and it’s critical that you use one when buying a home. Your agent will help you set up an online home search based on your pre-approval and your needs. They’ll schedule showings and accompany you on home tours. Once a property catches your eye, your agent will help you write your offer and negotiate with “the other team,” otherwise known as the seller. If it all works out and you come to terms with the seller, you go under contract.
Once you’re under contract your real estate agent’s job doesn’t stop there. Your agent will help you work through your home inspection and coordinate with your mortgage broker to make sure deadlines are met and everything runs smoothly through closing.
We can’t stress enough how important it is to have an agent on your side! Your agent is your advocate, they work for you and your best interests. Best of all they won’t charge you a dime for their services because they get paid
by the seller!
It’s Game Time – The Process
You found a home, made your offer and the seller said YES! Congratulations you’re halfway home.
Now its time to get the loan.
If you completed step one and were pre-approved correctly, this part should be painless and simple. Your mortgage broker will receive a copy of your purchase contract and complete your loan application. They’ll lock in your interest rate based on the appropriate loan program, as well as prepare your application and state and federal disclosures for your signatures with the lender. Most lenders will email you the loan paperwork and will allow you to sign electronically. Mortgage disclosures are time sensitive so it important to pay close attention to your email for instructions given to you by your broker or the lender.
Once your loan package is signed, your broker will order your property’s appraisal, and upload your supporting income documentation and banking information to the lender for an underwriting review. The underwriter will make sure
the information on your loan application matches up with your documentation and, if everything looks good, they give the loan a conditional approval. That means that they approve the loan but need additional documentation either
from you or regarding the property.
The underwriters can seem demanding, but they are really on your side and want to approve your loan. The broker will be in communication with any additional documents necessary and can elaborate on what the underwriter needs to
fully approve the loan. It’s important to remember that your loan has a deadline, so staying on top of additional document requests is crucial to closing your loan on time.
Touchdown - Closing Day!
The loan is approved. Closing day is in sight. You’re packed up. I hope you’re excited!
The days leading to closing will be a whirlwind, but are just as critical as the days spent in underwriting:
Your lender and broker will coordinate with the title company to issue a set of really important documents called the Closing Disclosure, or CD.
The CD will outline the final itemized cost of your loan, your interest rate, monthly payment, the exact amount you need to bring to closing and detail some of the specific features of your loan. If your original loan estimate was done correctly, there should be no surprises on the closing disclosure. This document, by law, needs to be issued to you and signed at least 3 days before closing. Missing the 3-day rule will cause a delay in closing and nobody wants to miss that deadline.
The day of closing has arrived, you’ve completed your final walk-through of your new home and you’ve arrived at the title company… what’s the title company?
The title company is a 3 rd party that prepares all the real estate and mortgage closing documents that will put the home and the loan in your name. They also collect all the funds from you and the lender and make sure they are distributed to the appropriate parties. The most important thing they do is insure that you get your home with a clear title in your name and your ownership is recorded with county.
Be prepared for your closing to last about an hour and bring a valid ID. Your down payment and any other money that you agreed to bring to the table should also be in the form of a cashier’s check or have been wired to the title company the day before. Cash or personal checks are not acceptable forms of payment. There’s going to be a lot of signing your name in front of a notary at the closing table and your hand is going to hurt but it’s worth it!
The seller just handed you the keys to your new address! Congratulations! It’s time to jump in the U-Haul and move in!
You did it, you’re a HOMEOWNER!