Buying Process
1.) Pre-approval
The first step in buying a new home can save a lot of headache in the long run. Meeting with a mortgage professional will guide you to finding a home that is in means of your borrowing abilities. We will assess your income, assets, and credit to determine the purchase price that will suit your needs. The following documentation is needed:
- Last 30 days worth of pay stubs
- Past 2 years W2’s and tax returns
Past 2 months bank account statements (all accounts)
Award letters (retirement, social security, etc.)
Once all the aforementioned documents are reviewed and credit is pulled, we can determine an appropriate purchase price and monthly payment that you qualify for and are comfortable with. Of course there are calculators online that help give you an idea of what you may qualify for, but these calculators do not include all costs included in buying a home. We can help you get a better estimate of what you will be most comfortable with once insurance (home owners, flood, title, etc.), taxes, closing costs, etc. are estimated. In addition, sellers prefer buyers who have a pre-approval letter in hand.
2,) Type of Loan
In the initial pre-approval meeting, we will also determine which program is best for you. There are many different types of programs available to home buyers today: Conventional, USDA, FHA, VA, and Jumbo. Each program has different features and benefits. Some offer 100% financing, while others require down payments of 3.5%, 5%, or 20%. One of our mortgage professionals can help you understand the differences between all the programs, and determine which is best for you.
3.) Shop & Submit Offer
Once you and your mortgage advisor have determined a purchase price that you would be comfortable with, you are ready to start looking for your home. You may choose to work with a real estate agent in finding your home, or you may choose to shop on your own and work directly with the seller. Once you find the home you want, you must submit an offer. You will sign a purchase contract secured by earnest money. The seller will either counter offer or accept your offer. If accepted, the due-diligence period begins.
4.) Loan Processing & Underwriting
Once you have your completed sales contract you will set up an appointment to get the loan process started. You will complete a loan application, sign all necessary disclosures and any other docs. All income and asset documents will be verified. Appraisal will be ordered. Quotes for any applicable insurance (homeowners, title, flood, etc.) will be requested. All of these, among other documents, will be sent to underwriting for approval. Additional information may be requested by the underwriters. It is crucial to satisfy all requests in a timely manner due to time restraints set by law. Once your loan is approved, you are ready for closing.
5.) Closing
Finally, it is time to close! Prior to close your mortgage professional will review and have you sign the closing disclosure. This will explain funds you need to bring to close, all costs pertaining to your mortgage, and any other details. The closing will be held at an attorney’s office in which a closing agent will review several closing documents for your to sign. Be sure to bring your funds to close and two forms of identification. Once complete, you will officially own the home. The funds will be wired, and you are responsible for the mortgage.