Mortgage Prequalification
During the prequalification process, your Loan Officer will review your personal finances and home-buying goals to help you match the type of home you want to buy with what you can afford. Your lender will discuss loan programs, down payment required, etc.
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Documentation
You’ll need to document your assets, income and credit history by providing bank and investment statements, pay stubs and tax information such as a W-2 or tax return. Your loan officer will also request a credit report.
Shopping for your new Home
Once you decide to shop for a home you may want to work with a real estate agent. Real Estate Agents often work with other agents and visit the homes that are available to purchase so they have an edge in helping you determine where you may want to look for your home. Your agent can help you negotiate a price with the seller. You may want to visit the Lewis Clark Association of Realtors website to see a list of local agencies and agents.
Homeowners Insurance
You should begin looking for an insurance agent as soon as you start searching for a home. This will give them time to obtain multiple quotes. Also often you may qualify for a discount if you bundle your home and vehicles with the same company. Depending on where your home is located, you may also be required to purchase flood insurance if your home is in a flood plain.
Making an Offer to Purchase
Your realtor will check for comparable homes and their prices to help you make a decision on what you want to offer on the home your have chosen.
A purchase can be stressful for both buyer and seller and this is where a realtor can really help you get through the process to complete the purchase. They can explain the reason you feel it’s a competitive offer by discussing the other home comparables in the neighborhood. Ultimately, you and the seller will agree on a price and conditions. You will make an earnest money deposit on the purchase and sale contract to show your good faith. You also set a closing date and need to make sure it is enough time to allow you to get your home loan, an appraisal done and final closing documents signed and funded.
Time to get that Home Loan
Once you have a purchase and sale agreement, it’s time to contact your lender again and update your financial information. Your loan officer will prepare a Loan Estimate which discloses all the known loan costs. Your purchase and sale agreement will indicate which title company you both agree to work with and the lender will ask the title company for a title commitment to make sure the title and deed to the property are clear and the seller has the right to sell the property. Once you have reviewed the Loan Estimate it is a good time to lock in the interest rate for your loan. Your lender will lock the rate for you after your approval.
Home Inspection
Before you finalize the purchase, it’s important to have an inspection done. You should attend the inspection, ask questions and take notes.
Home Appraisal
Your lender will hire an appraiser to make sure that the selling price is consistent with current market values and provide a value for the subject property. The appraiser will do an on-site review, take photos and documenting its value by reviewing other sold home comparables. Your lender will give you a copy of the appraisal report to review.
Loan Review / Underwriting
Your lender has underwritten your loan by checking your Credit Report (your history of paying your bills on time), Capacity (your ability to pay, review of your debt-to-income ratio), Capital (your down payment and savings) and Collateral (the property’s qualifications and appraised value). This review will take 24 – 48 hours once all of your documentation is received from you.
Loan Conditions
Often the lender will come back to you asking for additional information / documentation to finalize your loan.
Loan Approval
Once all loan conditions are addressed then your lender will receive a “Clear to Close” and will send you a Closing Disclosure of the final loan terms and closing costs for your review. Once you have acknowledged receipt of the Closing Disclosure, the final loan documents can be signed three days from the time you received it. This is a mandatory three day requirement.
Getting Ready to Close on Your Home
Now you need to get your down payment funds for the closing date. You will also need to have your homeowner’s insurance policy and any conditions finalized. The lender will prepare the final loan documents and send them to the title company who will review and add details regarding taxes or any items to be paid at closing.
Final Walk-Through of Your New Home
You should take a final walk-through of your new home prior to closing on your loan. Any repairs should be completed and you should review the property inspection checksheet to make sure all items were addressed.
Closing Day / Signing Docs
Your title company closing escrow officer will walk you through the closing process, get all the documents together and make sure everything is legally signed and witnessed. You will bring a cashier’s check to closing for the closing costs/down payment required.
Keys to Your New Home
You will now get the keys to your home after the loan is funded!
Moving Day!
Moving day is time to celebrate! Whether you move yourself, find some awesome friends to help or hire a moving company; you can be sure that your house will soon feel like home.