Resources for Home Buyers
5 Steps for the Perfect Home Purchase Experience
Step 1: Lender Pre-Approval. Preview Homes. Write offer & Negotiate Price.
Step 2: Home Inspection. Post Inspection Agreement. Order Home Warranty.
Step 3: Title Search. Appraisal Ordered by Lender.Final Commitment Letter by Lender.
Step 4: Termite Inspection. Schedule Homeowners insurance. Final Amount Needed for Closing.
Step 5: Schedule Utility Transfer. Final Walk Through. Closing.
Determine How Much You Can Afford
Lenders typically recommend homes with a cost no more than three to five times your annual household income, with a 20% down payment and moderate amount of other debt.
Get Pre-qualified and Pre-approved
- Initially you’ll provide some financial information to your lender – such as your income and amount of savings.
- For pre-approval, your lender will need W-2 statements, pay-stubs, bank account statements and to run a credit check.
Preview Homes & Write Offer
After touring homes in your price range, I’ll assist you in writing an offer on the right home. We’ll present a fair offer based on the value of comparable homes in the
area. We may need to negotiate this offer with the sellers until accepted.
The immediate step after making an offer and having it accepted is to complete any inspections that the offer was contingent upon. If one of the contingencies was a
home inspection, you’ll have a certain number of days to complete this after the offer is accepted.
Post Inspection Agreement
This form will be used after the home inspection if there are any counter-offers to
the seller, asking that items considered defective or problems relating to the safety
of the home are corrected prior to closing.
A home warranty can be purchased to cover repairs and replacements on systems and appliances in your home, usually for a period of a year. This may include coverage of your home’s electrical, plumbing, heating, and air conditioning systems
as well as other home appliances.
Title is the right to own, possess, use, control and dispose of property. When
purchasing a home, you are actually buying the seller’s title to the home. Before the closing, a title search will be conducted for any problems that might prevent you from a clear title to the home. You will also want to determine how you wish to hold title to the property especially if you’re buying with a spouse, a partner, family member, or colleague.
An appraisal is an estimate of the value of a property. Although the primary goal is to justify the lender’s investment, the appraisal can also protect you from overpaying.
Your lender will typically hire the appraiser and charge you a fee for the service at the closing.
Final Commitment Letter
After the lender approves your loan, you will get a commitment letter that stipulates the loan term and terms to the mortgage agreement. This final commitment letter will include the annual percentage rate and the monthly costs to repay the loan. It will also include any loan conditions prior to closing.
When purchasing a home, most lenders require a termite inspection to know if the property has been damaged by termites or other wood destroying insects. If the home has any structural damage, the lender will require the property be treated and
Lenders also require proof of insurance on a home before issuing a mortgage. Payments toward a homeowners insurance policy are usually included in the monthly payments of the mortgage.
Final Amount for Closing
You won’t know your final cost for closing until the last couple of days. You’ll find the summary of costs on the HUD-1 document.
Tips for Mortgage Financing
Always check with your lender before doing any of teh following prior to closing on your home:
- Making a big purchase:
Avoid making major purchases, like buying a new car or furniture, until after you close on the home. Big purchases can change your debt-to-income ratio that the lender used to approve your home loan and could throw the approval into jeopardy.
- Opening new credit:
Do not open any new credit cards or get a loan without speaking to your lender first.
- Missing any payments:
Pay your bills on time to keep your credit score from dropping.
- Cashing out:
Avoid any transfers of large sums of money between your bank accounts or making any undocumented deposits – both of which could send “red flags” to your lender.
- Keep the same job:
Be kind to your boss and keep your job. Don’t begin looking for new work right now, unless it’s a second job to make extra money.
Things to Bring To Closing
- A valid government issued photo ID.
- Cashier’s check for the total amount due.
- Outstanding documents for the title company or mortgage loan officer.
Some of the most common fees include:
- Escrow fees.
- Recording and notary fees, if applicable.
- Title search and title insurance.
- Origination, application and underwriting fees from lender.
- Appraisal fees.
- Local transfer taxes.
- Homeowners Insurance.
- Home Owners Association fees, if applicable.
Make sure to keep copies of all closing documents for tax purposes.