Step 1: Get Pre-Approved - Purchase only
Pre-approval is different than pre-qualification. Pre-qualification means the loan officer has taken some of your preliminary information, and made a tentative decision, but not verified any of it. When you are pre-approved your debt, income, assets and credit are all verified and you’re conditionally approved for a loan, up to a specific amount and under certain terms and conditions. Becoming pre-approved means; you save time by looking at homes in your price range and increase your bargaining and negotiating power.
Step 2: Make an Offer - Purchase only
Making an offer on a home is an exciting step - you've found the house you want and you're working towards making it your home. Once you’ve negotiated the terms of the sale, including the sales price, repair requests, move-in date, etc. your real estate agent will present your offer to the sellers. Your pre-approval letter will usually be submitted with your offer since it can tilt the sale in your favor, especially in a competitive market. Once the seller accepts your offer, the offer becomes a contract – you've contracted to buy a house.
Step 3: Make Loan Application
Once the seller accepts your offer, please contact your Mortgage Planner with the terms of the sale (Sales Price, Closing Date, Earnest Deposit, Seller Credits, Etc.). The loan application package is then prepared specific to the terms of the agreement for your review and signatures. If any of the income and asset paperwork obtained during the pre-approval process has expired, you may be asked for more current documentation at this time.
Step 4: Home Inspection - Purchase only
A home inspection is a non-invasive examination of the condition of a home. This is carried out by a home inspector, who usually has special equipment and training to carry out such inspections. A home inspection report is then issued by the home inspector.
An inspector will typically check the roof, basement, heating system, water heater, air-conditioning system, structure, plumbing, electrical, and many other aspects of the home. They look for improper building practices, those items that require extensive repairs, items that are general maintenance issues, as well as some fire and safety issues. A home inspector conducts a thorough examination of a home to detect any potential systems or components requiring attention. A home owner receives a detailed report of the condition of the home so that they can plan for needed repairs and upgrades when it is time to make them.
A home inspector is sometimes confused with a real estate appraiser. A home inspector determines the condition of a structure, whereas an appraiser determines the value of a property.
Step 5: Appraisal Report
Once the home inspection has been completed and accepted by both parties, an appraisal report is ordered. The appraisal is an important step in the home buying process, because the appraiser's report offers a close estimate of a property's true value.
Effective May 1, 2009, Federal changes require the appraisal be ordered, and fees collected, by an independent third party. The appraisal report will be e-mailed to you upon receipt.
Step 6: Home Owners Insurance
It’s time to start shopping for home-owners insurance coverage for your new home. Here are some quick tips to save you money:
- Car/Home Discount: Insuring your car and home with the same company often will give you a package discount.
- Deductible: Raising your deductible can reduce your annual premium.
- Home Security Systems: Special burglar alarms can prevent losses and therefore makes your house less of an insurance risk.
- Smoke Alarms: Preventing a fire loss is important to your insurance company.
- Non-Smoking Household: Insurers are trying to cut costs and look for people to insure that pose the least risk. A lot of accidental fires are caused by smokers. Some insurance companies give a discount for non-smoking households.
- Electronic Payments: Many companies are now charging up to $5.00 or more for payments made by mail, but do not charge for automatically deducted payments.
- Credit Rating: Yes, a lot of companies are checking your credit and basing your policy on what is found.
- Additional Discounts: There are many additional discounts that may be available such as a reduced senior rate or being in a gated community.
Once you’ve chosen a home-owners insurance company, you should notify your loan processor.Step 7: Loan Processing
The Loan Processor obtains the necessary information to process and complete loan files. They examine documents to ensure accuracy and compliance with existing underwriting guidelines. The Loan Processor will be verifying information on the loan application including, your employment and income, your credit report, your assets, the property appraisal and many other fine details.
During the underwriting process the Loan Processor will be in communication with your Mortgage Planner, Real Estate Agent and you to make sure the process moves along on schedule. Your Loan Processor may request additional information that is needed to submit the processed file to underwriting. The sooner we have all the required information the faster we can finalize your financing needs.
Step 8: Mortgage Underwriting
This is the final step in the approval process. The underwriter reviews information compiled by the loan processor to determine if all lending guidelines have been met. Then the underwriter issues a conditional approval with any remaining items needed prior to; and at closing. Again, the sooner we have all the required information the faster we can finalize your financing needs.Step 9: Loan Closing
Your closing date is set once your loan has been approved. Often, the real estate professional will coordinate this date with you, the seller, your lender and the closing agent. The day before closing the settlement statement (Form HUD-1) is prepared by the closing agent. The HUD-1 itemizes the remainder of funds due, after the down payment (minus the amount of your earnest deposit) and closing costs. You will be required to pay this amount with a cashier’s check or wire.Step 10: Move In!
Now it's Time to Protect Your Investment with a Home Warranty
A home warranty is a service contract that covers the repair or replacement of many of the most frequently occurring breakdowns of home system components and appliances.
Your home is most likely one of your biggest investments. Unexpected repair or replacement costs can easily strain your budget. Plus, finding an approved and insured contractor to solve your problem can be stressful and inconvenient. A home warranty cannot prevent systems or appliances from breaking down, but it can help make covered repairs or replacement easier and less costly
Visit our Partners page for a list of service professionals!
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