Ask The Loan Man

Home Buying Process

Home Buying Steps / Process:

Step 1 – Getting Pre-Approved Prior to Shopping for a Home

It’s obviously important to know how much home you can afford, what type of down payment to budget for, monthly mortgage payment as well as what type of loan program you’ll be using to finance the new property.

Certain mortgage loans have residence type, HOA, appraisal or insurance restrictions that your agent needs to be aware of prior to showing you listings.

A personalized strategy session with a trusted mortgage professional should address all of your initial loan approval questions, as well as uncover any potential challenges that can complicate the entire transaction.

Step 2 – Assembling Your Home Buying Team – Knowing The Players

The home buying process has many steps, participating parties and potential challenges that can be overcome with the right team on your side.

Your agent, attorney, title company, insurance agent and lender all have important roles to play.

Buying a new home is literally a team sport since there are so many tasks, important timelines, documents and responsibilities that all need special care and attention.

Besides working with a professional team that you trust, it’s important that the individual players have the ability to effectively communicate and execute on important decisions together as well.

Step 3 – Purchase Offer Submitted

Assuming that you’ve already been given a mortgage approval and have a firm understanding of the type of property you are qualified to purchase, your agent will submit your purchase offer to a listing agent or seller.

Once you receive an accepted offer, the due-diligence period starts a series of timelines for final mortgage approval, appraisal, inspections and other requirements which would be spelled out in the terms of the contract.

Step 4 – Conditions and Paperwork

It comes in from all angles at this point, lenders, processors, insurance agents, sellers, real estate agents…. and the list can go on.

Step 5 – Closing

A successful closing requires all of the team players to come together at the same time, with the same agenda, on the same date…. with numbers and figures that match.

Related Home Buying Process Articles:

Renting vs Buying

Buying a home versus renting is a big decision that takes careful consideration.

While there are several biased sources that can make arguments for or against owning a home, we’ve found that most home buyers base their ultimate decision on emotion.

Cost, Qualifying, Freedom, Maintenance and Security are some of the main reasons for renting, as well as owning.

…….(read more about Renting vs Buying)

Seven Things Your Agent Should Know About Your Approval

While many experienced real estate agents have a general understanding of the mortgage approval process, there are a few important details that frequently get overlooked which may cause a purchase to be delayed or denied.

New regulation, updated disclosures, appraisal guidelines, mortgage rate pricing premiums, credit score, secondary approval layering, rescission deadlines, property type, HOA insurance requirements, title and property flip rules are just a few of the daily changes that can have a serious impact on a borrower’s home loan financing.

…….(read more about Your Approval)

Important Factors To Consider When Purchasing A Foreclosure or Short Sale

Short sales, foreclosures and new construction homes all have caveats that need to be considered when pursuing financing.

If the guidelines and potential pitfalls are not properly understood, you could face delays in closing or potentially even a denied loan.

Property Condition, Timing Challenges, New Construction Appraisal Process… are a few issues that your agent will need to have experience paying attention to in order to ensure a smooth mortgage funding and closing process.

…….(read more about Purchasing A Foreclosure or Short Sale)

First-Time Home Buyer Credit Checklist

Getting a new mortgage for a First-Time Home Buyer can be a little overwhelming with all of the important details, guidelines and potential speed bumps.

Since there are so many rules and steps to follow, we’ve put together a simple list of Do’s and Don’ts to keep in mind throughout the mortgage approval and closing process.

Consolidating credit cards, paying off collections and multiple inquiries on your credit report are a few things that could have a negative impact on an approval.

…….(read more about First-Time Home Buyer Credit Checklist)

…..

Frequently Asked Questions:

Q:  What Is The Difference Between A “Buyer’s” and “Seller’s” Market?

Simple economics is the rule of thumb here.

Everyone wants to “buy low and sell high,” but the truth of the matter is there is no way that can happen for everyone, every time.

Seller’s Market = More buyers than sellers

Buyers Market = More sellers than buyers

Q:  Where Does My Earnest Money Go?

The Earnest Money Deposit is credited back towards the buyer’s closing costs and/or down payment.

Any additional funds are given back to the buyer from the escrow company.

Q:  Do I Need A Home Inspection?

Some mortgage programs require a borrower to get a home inspection if it is mentioned in the purchase contract.

Either way, there are several reasons why it is important for a home buyer to have a licensed professional take a closer look at a property before the transaction is finalized.

…….(read more about home inspections)

Q:  Does it matter if I buy a home that is part of a Home Owner’s Association?

A Home Owner Association may have the power to determine the color of your home, the number of pets you have and the type of grass you have to plant.

They also may have the power to levy assessments, dues and fines.

Or, they may be as simple as collecting a few dollars per year to make sure the grass is cut in the common areas.

…….(read more about HOA Hurdles To Be Aware Of)