GET PRE-APPROVED or have a proof of funds letter if you are paying cash. You first want to get pre-approved by a lender. If you have not already chosen one, I can recommend some to you. All you have to do is ask!
CONSULTATION Set up a time that you can sit down and discuss you wants and needs and form a game plan to meet you goals.
START LOOKING FOR REAL You have probably been looking for a while online. Now this is the time to take your goals and put them in action.
FINDING THE ONE You may have to only look at one house. Keep your goals in mind and an open mind. As a trained professional many times it only takes looking at no more then ten homes to find the ONE. A great broker once told me you know it’s the one when you walk in to the home and it blows your skirt up!
MAKING AN OFFER Once you decide you want to make an offer on a home, we will sit down and evaluate the price, and concessions. Keep in mind that just because a home is bank owned or has been on the market over 6 months doesn’t mean the seller will come down on the price. The home may still be priced correctly. Keep in mind also about what you are asking in the offer.
ACCEPTANCE Once the contract has been accepted as a buyer you will needs to set up a home inspection. As the buyer, you can do the inspection yourself or hire a licensed home inspector. A general contractor is not considered a licensed home inspector. Repairs if any will be negotiated out between you as the buyer and the seller.
LENDER ACTION once the home inspection has been completed the lender will order the appraisal. Back in the pre-approval process you brought your paperwork to the lender, at this time the lender may need updated information to send to the processors.
FINALIZING CONDITIONS The property title will be searched by the title company and title insurance will be ordered any other items needed by the lender to get the package to closing will also be requested. Keep in mind that the processor and the underwriter are the ones looking at the loan to make the final approval.
CLOSING Once the loan has been approved and the package sent to the closing department and then to the title company. You and the seller will come to closing where the title company will have all the bank forms to sign. These forms basically say you don’t pay you don’t stay.
BECOMING A NEW HOMEOWNER After all the paperwork is signed the process of buying ends, and home ownership begins.
In today’s market there are many financing options available. Below are a synopsis of the major programs available.
The fixed-rate mortgage is the most popular mortgage program in use today. Fixed-rate loans offer the borrow a fixed interest rate for the life of the loan, typically 15 to 30 years. Borrowers have peace of mind knowing that their monthly payment will not change over time. Conventional fixed-rate mortgages have underwriting requirements established by Freddie Mac and Fannie Mae, and require certain down-payment and debt-to-equity ratios to qualify. Fixed-rate loans are especially attractive to buyers who plan to stay in their home for more than a few years.
With an Adjustable Rate Mortgage (ARM), the interest rate changes periodically, and payments up or down accordingly. Rates are tied to an index that reflects the cost of money at any given point in time. Generally speaking, lenders charge a lower initial interest rate for the ARM than for the fixed rate mortgage. If you are expecting interest rates to decrease in the future, or if you are trying to maximize your purchase power today knowing your income will rise in the future, then this loan may be right for you. Adjustable rate loans are attractive for buyers who expect to be in the home for a short period of time.
The Federal Housing Administration (FHA), offers loans for low-to-moderate-income home buyers. FHA loans have lower down payments, and have relatively easier requirements than conventional fixed-rate mortgages. FHA mortgages have no income restrictions and even those with lower credit scores may be considered. Past bankruptcy does not necessarily disqualify borrowers from using this program!
In addition, the Department of Veterans Affairs (VA) offers a zero-down mortgage program. To take advantage of this program, borrowers need to be among those listed as veterans and service personnel in the U.S. military. One of the biggest benefits of this program is that it eliminates the need for private mortgage insurance!