Owning a home is part of the American dream and something that many aspire to. With interest rates the lowest they have been since June, now is a great time to consider buying a home. If you start looking now, you could be in your new home for the holidays.
While buying a home is exciting, many people are confused about the process, causing them to not move forward. Purchasing a home is actually easier than you may think. Working with a seasoned mortgage banker can help make the process smooth and hassle free.
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Step by Step Directions for First Time Home Buyers
1. Speak with a mortgage lender and get pre-approved. Before you start looking at houses you need to know how much you qualify for. Your mortgage banker will review your credit and income history to tell you the amount you are approved for and how much of a down payment you will need.
2. Get a pre-approval letter. Your mortgage lender will give you one to show to your real estate agent. They will include this when you make an offer on a home.
3. Create a wish list. Write down the things you must have, and the things you would like to have, in your new home. It may be challenging to hit every box, so identify early on the things you are willing to compromise on.
4. Hire a real estate agent. Interview several real estate agents and find one that is an expert in the area you want to live. If they have been selling real estate in a particular neighborhood for years, they are more likely to know about off the market sales, and may even be able to approach prior clients on your behalf.
5. Tour houses. Visit homes in your area until you find the perfect house. Remember that you can easily change the paint color or appliances in the home. Focus on the structure of the home and how good the overall condition is.
6. Make an offer. Your real estate agent will ask you how much you want to pay, offer suggestions, and write your offer on the purchase and sale agreement. You sign these forms and your agent present them to the seller or the sellers real estate agent.
7. Negotiations. The seller and the buyer will typically negotiate on items like prices, closing cost, and repairs. Be prepared to negotiate and compromise. If you can meet in the middle, you will have been successful.
8. Loan Approval. Your mortgage lender may have already submitted your preliminary credit and income information to the underwriter for a pre-approval. Once you have identified the property, they will submit your purchase and sale agreement along with any updated information. The underwriter will review this information and let you know if anything further is needed.
9. Order a Title Report. Your mortgage banker will order a title report. This report will prove who owns the property and if there are any other liens filed on it.
10. Home is Appraised. The lender will have the home appraised to make sure that it is worth the sales price. If the appraisal comes in lower the seller will have to drop the price, or you will have to make a larger down payment.
11. Loan Documents. Once the appraisal and title have been reviewed the mortgage lender can issue a final approval and draw up loan documents. You will typically sign documents at the escrow office, or in your home with a notary.
12. Closing. Your loan will close, and the title will transfer into your name, after all of the documents have been signed and received. Both you and the seller will need to sign documents at escrow. Loans typically close within one to two days of loan signing.
13. Move in! Grab your keys, pack your bags, and move into your new home.
Buying a house is easy when you work with an experienced mortgage banker and real estate agent. Mortgage interest rates are low, and the VA is offering zero down with the FHA offering as little as a 3% down payment. Call your mortgage banker today to start the process.
