1) Loan Pre-Approval
Before you begin to shop for a home, enhance your buying power by getting pre-qualified or pre-approved through your financial institution.Why is pre-approval better than pre-qualified?Pre-qualification is an informal discussion between borrower and lender. Getting pre-qualified helps you determine how much home you can afford, based on information you share with your lender. The lender does not verify this information and no guarantee you will qualify for the loan amount.Pre-approval is considerably stronger than a pre-qualification, because the seller knows your financing is secure, your offer is stronger. Getting pre-approved requires your financial information and does serve as a commitment to lend a specified amount. This gives you significant buying power with a seller.
Documents that are generally required to process a loan application:
Name and address of employer for past two years.
W-2’s for past two years.
Pay stubs for past two pay periods.
If self-employed, personal tax returns for past two years and YTD Profit and Loss and Balance Sheet
Housing for past two years:
RENTING – name, address and daytime phone of landlords
OWNING – mortgage lender name, address and account numbers
List of all debts including account numbers, monthly payment amount, current balance, lenders name and address
Last two months bank statements for checking accounts.
Last quarterly statement on 401-K, savings, thrift, stock, etc.
Copy of driver’s license and social security cards.
Verification of Social Security or retirement income, if applicable.
To verify assets from sale of present home, the following are needed: Listing contract, offer and acceptance and settlement statement.
2) Hire a Real Estate Professional
Working with a real estate professional is worth consideration because they are legally responsible for representing your interests in a real estate transaction.
3) Define What You Want
The next step is to create a realistic idea of the property you’d like to buy. What features are most important to you? Make two lists: one of the items you can’t live without and one of the features you would enjoy. Refine the lists as you house hunt. It is also helpful to search online to see what is currently available on the market. Your real estate professional can then show you houses that meet your expectations. Register here for free alerts as properties that meet your specifications become available for sale.
4) Visit Properties
Now you’re ready to visit houses. Ask your real estate professional to arrange showings and keep track of the properties you’ve seen.
5) Rate the Houses You Tour
After touring each home, write down what you liked and didn’t like. Develop a rating system that will help you narrow the field down. For example, pick the house you like best on day one and compare all other houses to it. When you find a better one, use the new favorite as the standard.
6) Make an Offer
Once you’ve found your dream home it’s time to get serious about the financial and contractual side of the purchase. Your Connie Wise Real Estate Associate will be a strong advantage in making an offer. You will want to make an offer to purchase and give the seller earnest money to seal the deal. When the offer has been accepted by both you and the seller, you will need to contact your loan officer.
7) Secure Your Mortgage
When the offer is accepted, secure your mortgage by contacting your loan officer so he or she can order the appraisal and start your final loan process. Your loan officer will give you a good faith estimate which shows your monthly payment as well as estimated cash needed for closing. Once the loan is approved your loan officer will contact the closing company with final closing instructions. The closing company will notify you and your real estate professional of the date, time and the items you will need to bring to closing including the amount of the cashier’s check needed to pay your closing costs.
Before your closing date, make sure you’ve made all necessary deposits and completed the paperwork – including mortgage, title, homeowner’s insurance and any other paperwork required by local or state governments.
9) Prepare for Life in your New Home
Before rolling out the welcome mat, consider some moving basics: turn on electricity, water, gas, cable and telephone, notify your local post office of your new address, any subscriptions and all of your friends!