Step 1:
Getting Pre-Approved for a Home Buyer’s Program
Pre-Approval –What is it, and why do I need it?
When you are in the market for a new home there is no greater negotiating
tool than the Mortgage Pre-Approval. With this valuable instrument in hand,
it shows all parties involved in the real estate transaction that you are
serious, ready and have already obtained financing. It is becoming common
practice for real estate agents to ask that you get a Pre-approval Letter
from a before they will even show you a home. There are some mortgages terms
that may seem alike but differ in their importance.
Pre-Approval vs. Pre-Qualification is there a difference?
Yes, there is a big difference between “Pre-Approval” and
“Pre-Qualification”
Pre-Qualification
Mortgage Pre qualification is a simple calculation of the amount of home a
buyer can afford. It is solely based on the information that is provided by
the borrower with no credit inquiry, asset or income verification.
Pre-Approval
Loan Pre-approval is a much more involved than a simple Pre-qualification. A
Pre-Approval is generated from your lender and requires a review of your
credit report, pay stubs, assets, liabilities and so fourth. The
Pre-Approval also provides valuable information to the Real Estate Agent as
to the amount of home a buyer can afford and any other conditions that may
be applicable for a home purchase transaction.
Are you ready to get started on your pre-qualification loan process so you can purchase a home? Contact Agents Chris and Terri McChesney and
we will refer you to an independent mortgage broker who can assist. We have a large database of independent
mortgage brokers who will work with almost any financial situation and credit history.
You should consider:
Down Payment:
This is the amount of money that you have available to put toward the
purchase of a home. Saving for the down payment is usually the most
challenging part of buying a first home. Many people never take the first
step just for this reason.
Closing Costs
Don't forget to budget for closing costs. There are other costs beside your
down payment associated with purchasing a home. You have to take into
consideration closing costs. Some additional fees associated with closing
costs are points, lender's fees, title charges, attorney’s fees, escrows for
your property taxes and home owners insurance.
Monthly Payment
What monthly payment is comfortable for you? That is a personal decision.
Just because you qualify for a certain loan amount doesn't mean you are
required to use the maximum financing available to you. Along with the
mortgage payment, property taxes, homeowner insurance and all of your
monthly liabilities don't forget to budget for the future. Vacations,
entertainment, future college tuition etc. also cost money and you do not
want to deprive yourself. You do not want overextend your budget and work
solely to make your mortgage payment.
Step 2:
Going House Shopping
Now that you know exactly what you have been Pre-Approved for, most people
start with contacting a real estate agent. You should also shop for a real
estate agent that you are comfortable with and that works hard for you.
Start by narrowing the field. Your real estate agent should be knowledgeable
and familiar with the area that you want to purchase your new home. Pick an agent
that wants to work with you in fulfilling your home purchase needs. Agents Chris
McChesney and Terri McChesney of Golonka, Coyle and Associates will dedicate their services
to finding the home of your dreams.
You should consider:
The length of time you will remain in the home
If you plan on never moving again, will this home meet your needs? Do you
plan on moving in a few years? Are you planning a family or will your income
increase over several years? It is important to know how long you plan on
staying in your home before you purchase.
The neighborhood
Don't make the mistake of purchasing a home in a neighborhood you know
nothing about. Will this neighborhood meet your needs? Ask the neighbors the
true story about the neighborhood.
Type of Property & Features
Are you looking for a single family home, a townhouse, or condo? Before you
begin your house shopping, decide what type of property and features that
will satisfy your needs. Also don't purchase a house that may be hard to
resell. When you are looking for a home, think about how you would sell it!
Step 3:
Offer & Sales Agreement
Once you have found the home that meets all of your needs, you will
negotiate a sales price and make an offer to purchase the home. When the
seller accepts the offer a Sales Agreement is signed by all parties.
You Should Consider:
Put Everything in Writing
If certain arrangements were promised such as painting the exterior,
replacing moldings or any repairs, make sure it is in the sales agreement.
This will allow you to refer back to the written agreement if there is a
problem in the future.
Step 4:
Processing & Final Mortgage Approval
Now that you have found your property and have a signed sales agreement, it
is time to process your mortgage loan application with your Lender for final
approval. This step gathers and verifies all the documentation for your
loan. A real estate appraisal will be preformed to determine the value and
condition of the property you are purchasing. Your title work, a survey, a
house inspection (not the same as an appraisal) and a termite inspection may
also be ordered.
Once your file is complete, it is sent to underwriting to validate the
documentation provided by you. The underwriter may request addition
documentation at that time. Most Lenders' use automated underwriting
systems. This allows the lender to speed up the lending process.
Once your information is validated, you will be issued a final loan
commitment. Then you can schedule your settlement.
You should consider:
Providing Documentation
Be sure to give yourself plenty of time to process your loan. Time is of the
essence. When documentation is requested, it is in your best interest to
forward the information to your Lender as soon as possible. Often times,
your file can not be moved to the next processing step without the necessary
documentation. Providing documentation on a timely basis will make your loan
application process much smother.
Step 5:
Going to Settlement
This is the final step in purchasing your new home. This step is the actual
closing of the real estate transaction between you and the seller of the
property. Generally, the settlement takes place at the title company,
attorney’s office or real estate agency. All of the interested parties meet
to sign the final documentation. You may be in the room with the seller, the
seller's real estate agent, your real estate agent, your attorney and if the
seller brings an attorney. This final step will need to be coordinated with
all parties involved.
Once all of the settlement papers are signed and monies are exchanged, you
receive the keys to your new home, along with copies of all the closing
documents. Congratulation- You are now a proud new homeowner!
You should consider
Your down payment and closing costs:
Request a copy of the HUD settlement statement prior to your closing. This
form summarizes the entire financial transaction. It will also let you know
the amount of money you will need to bring to the settlement table. In most
cases you are required to bring certified funds to the settlement. You do
not want to be short money at the settlement table.
Your Timing
If you are currently renting now, planning the move to coincide with the end
of their lease often creates a big dent in the budget. Check with your
landlord about an early release or extension of your lease when you consider
buying your first home.
Step 6:
Contact Chris and Terri McChesney
It is now time to contact Real Estate Agents Chris
and Terri McChesney and begin your home search process. Armed with a knowledgeable
agent and your new home buyer tips, you will be sure to find the home of your
dreams.
