Buying a home for the first time
Buying your first home can be both exciting and stressful at the same time. A home purchase is often the largest purchase of someone’s lifetime and you want to get it right. The single most important step upfront is to work out your financing. Speak with a Mortgage Adviser. For them to get a good idea of what you can qualify for, you are going to want to have the following items ready.
– Last 2 years of tax returns (All pages)
– Last 2 years of W-2’s (If applicable)
– 30 days of most recent pay stubs
– Last 2 bank statements (All pages, screenshots ok with the URL on the bottom)
– A copy of your driver’s license and social security card.
With this list of items and a completed application, the Mortgage Broker can pull credit and look over your income and bank statements. The Broker will then most likely run the file through what is called an automated underwriting system for preliminary approval. This kind of approval is more powerful than simply a pre-qualification and can ensure the seller accepts the offer over other offers. The Broker will then determine which type of loan is best for you, such as a Conventional Loan, an FHA Loan, or a VA loan.
Once you have a pre-approval letter in hand, it is time to sit down with the Real Estate Agent and look over which areas you would like to live and what is available within your pre-approved price range. The next step is to have your Realtor provide you a list of properties you are interested in and set the property showings.
After you have seen several properties and have decided on one, you write the offer.
If the offer is not accepted, you must continue on until you find a house which accepts your offer.
After you have an accepted offer in hand, your Mortgage Broker will ask you for a few more items before submitting the loan.
The loan is then submitted and the appraisal is ordered, usually with your credit card.
Once the loan is out of initial underwriting, you will have a list of conditions to work with your Broker on fulfilling.
Some of these items will include:
– Hazard insurance for the home and any other homes you own.
– A title policy (your Broker will obtain this)
– Any divorce decree if applicable.
– A verification of employment (your Broker will call your employer to obtain this.)
– A copy of 1 month of any retirement accounts or accounts to be used for the down payment.
Once all conditions have been fulfilled, the loan will go back to underwriting for final approval.
In the meantime, the appraisal will be coming back. Make sure to look through your copy of the appraisal and keep a copy. During this time, you will also be completing a home inspection and resolving any issues the property has with the seller.
If any loan conditions remain, your Broker will ask for them at this time.
If the loan becomes “clear to close”, then you can sit back and wait for the closing day. (In most circumstances the timeline is pretty tight and the clear to close comes out very close to the closing date.)
The last step is to wire the down payment money to the title company and to schedule a time for closing.
Then you sign your mortgage and receive the keys from the previous owner.
It is then up to you enjoy your house and always pay your mortgage payment!