THE PATH TO HOMEOWNERSHIP
If you're a first-time homebuyer, the mortgage process may seem complicated. We're here to share our knowledge and make you a smart homeowner for life. Below is some basic information on the homebuying process.
Find a Mortgage Broker
Complete an application and provide your financial documents (such as: pay stubs, W2’s, banks statements and mortgage credit report, etc.) to be reviewed. Then a letter can be provided to you/realtor with the amount you are qualified to finance.
Make an Offer
Once you find the home you want to make an offer on, It’s time to run the numbers. Do you have enough for the down payment? Can you afford the estimated monthly payment on the home? Be sure to factor in costs like property taxes, HOA dues, insurance and maintenance ( I can help you with this). Have your real estate agent run comps, identifying similar for-sale homes in the area to help you get a feel for an appropriate offer price. Upon reviewing your offer, the seller might accept your offer as-is, decline the offer altogether or counter the offer to start the negotiating process. If the seller accepts your offer, they will sign the purchase and sale contract. If they decline your offer, negotiations end. If they counter, you can either accept their counteroffer or counter back.
Process Your Mortgage
Your loan officer/ loan processor collects the many documents necessary for your application. An underwriter then verifies your identification, checks your credit history and assesses your financial situation — including your income, cash reserves, equity investment, financial assets and other risk factors.
A mortgage underwriter’s job is to assess delinquency risk, meaning the overall risk that you would not repay the mortgage. To do so, the underwriter evaluates factors that help the lender understand your financial situation, including:
Your credit score
Your credit report
The property you intend to buy
The underwriter then documents their assessments and weigh various elements of your loan application as a whole when deciding whether they think the risk level is acceptable.
Close on Your Home
The home closing is the last chapter of this long home buying process. This is where you sign off on the deal and transfer the last of the funds. At the end of closing, the deed will be recorded, and the home will be yours. The closing is handled by a neutral third party closing agent. This may be a title company or a real estate attorney (more on this below).
At closing, significant events include:
A home’s title are transferred from seller to buyer
The proceeds of the sale are distributed to the seller
If the home is financed, the buyers sign the mortgage note
The buyer and/or seller pay other fees, too. This may include real estate commissions, title insurance, and pro-rated property taxes.