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Step 1: Renting VS. Buying
- Buying a home is one of the biggest decisions you will make in your lifetime, make sure you are ready.
- The first decision you must make is can I afford to purchase a home.
- What is my current rent payment now and what am I comfortable paying, for a mortgage payment.
- Monthly bills now and after buying.
Step 2: Prequalification Process
- Determine your home price range based on your re-occurring monthly obligations.
- First time homebuyer Document checklist.
Step 3: Choosing the right loan program
Step 4: Shopping for a Home
- You have officially been “pre-qualified”…..Congratulations!
- You should have obtained a pre-approval letter from your Mortgage Loan Originator.
- The pre-approval letter is a powerful negotiation tool that lets sellers know that you are a serious bona fide buyer.
Step 5: Selecting a Realtor
- There are many websites out there that show homes for sale, don’t believe everything you read!
- Many websites do not have up to date information about the status of a particular property.
- Selecting a qualified realtor will save you time by searching out properties for sale that meet you home hunting criteria.
- Residential Mortgage Solutions has experience with some of the top rated real estate agents in your market.
- Let us introduce you to one of our proven experts to get this process started today. Visit Our Realtor Partners
- If you decide to choose your own realtor, here are some great interview questions to ask: Questions to ask a Realtor
- The right realtor will act as your advocate on what will most likely be one the biggest purchases of a lifetime; do your homework upfront and choose wisely!
Step 6: You’ve found your dream home
- You have completed an extensive search for the home that you love….. it is time to make an offer.
- Your prequalification letter will be required by the seller’s agent to prove you are a bona fide buyer who is ready to purchase.
- Your purchase offer if accepted will become a binding sales agreement.
- Click here to view a list of items your written offer should include.
Step 7: The do’s and don’ts of the loan process
- You shouldn’t do anything that will have an adverse effect on your loan.
- Lets talk about the DO’s to pay attention to prior to the closing date of your loan.
- Always be responsive to providing documentation requested from your lender.
- Provide your EMD (earnest money deposit) from you own funds or acceptable gift funds.
- Watch your credit score through a credit monitoring company.
- Notify you Mortgage Loan Originator of where your assets for closing will be derived.
- Save as much money as possible for any unknown expenses that may arise.
- Make all your credit cards and installment debt payments on time.
- Communicate any positive or negative changes in your employment status or income.
- Discuss with your Mortgage Loan Originator how someone providing gift funds to you will be transferring the money.
- Now let’s focus on the don’ts of the loan process.
- Don’t open up any new loans, credit cards, cars or other debts until you go to settlement.
- Don’t change jobs or employment without consulting with your Mortgage Loan Originator first.
- Don’t deposit any cash into your account unless it is the exact amount that can be verified by a recent pay check.
- Don’t borrower any money from any person or company.
- Don’t transfer funds from different accounts before first discussing where the monies are coming from with your Mortgage Loan Originator.
- Don’t take any leave of absence or unpaid time off which could affect your qualifying income.
- Don’t spend the monies you are using for your down payment and closing cost.
Step 8: Processing and underwriting your loan
- After you have submitted the required documents for your loan, your file is broken down, organized and submitted for processing.
- The mortgage loan processor orders all of the required verifications on your loan including:
- Employment and residence history
- Rental or existing mortgage history
- Credit inquiries
- Title and appraisal requests
- Upon receipt of the required verifications, your loan file is submitted to underwriting.
- The underwriter will approve, suspend or decline your mortgage application.
- Once conditional approval is issued, you will receive the list of the conditions from your Mortgage Loan Originator.
Step 9: Final Approval
- You have met all of the conditions on your loan and the underwriter has issued a final approval or “clear to close”.
- You should expect a final Loan Estimate 4 business days prior to your closing date.
- Since 2015 the HUD 1 settlement statement was replaced by what is now called the CD or Closing Disclosure.
- The CD must be issued by email, mail or in person 3 business days prior to the settlement date.
- The purpose of this process is to make sure the loan rate, terms, fees and costs are accurate based on the initial Loan Estimate provided.
Step 10: Settlement Day
- Your contract has already determined your day of settlement.
- The coordination of where to close and the time is normally handled by your real estate agent for all parties.
- Prior to going to sign the loan documents your real estate agent will arrange a final walk through in the home you are about to purchase.
- You are encouraged to look for any damage that may have been caused by the moving company that the seller used.
- Most title companies or closing attorneys require your funds to be wired to their account one day prior to closing.
- Once have executed the many documents required a few other items still need to be resolved.
- Making sure the utilities have been transferred into your name on the effective day of closing:
- Get all of the keys to the house.
- Get the garage door opener and code.
- Get mailbox keys.