This is crucial to determining how much home you can afford as well as the best time of loan that works for you. Shop around for the best rates and lender program. In addition many lenders can help you set up a financial plan, if you have a few things on your credit to clear up first. Deona has several lender recommendations, if you need a starting point.

Now that you know what lender you want and the loan that best suits you, it’s time to apply for pre-qualification by submitting all your financial information to your lender, such as income, savings, and investment to find out how much money they can lend you. I recommend taking it one step further to decrease complications down the road and getting pre-approved, which will require submitting your financial documents (W-2s, paycheck stubs, bank account statements) so your lender can verify your financial status. With a pre-qualification or pre-approval letter in hand, you are ready for the fun stuff… 

Upon finding a home that you and your family are interested in – we will write an offer for the home. The contract is lengthy and oftentimes confusing but I will explain all of the documents and information in the offer to you upon reviewing and signing. 

When you are putting an offer in on a home that you and your family are interested in you will need to provide a couple things including: 

– the lender approval letter 

– a check for earnest money deposit (EMD). These funds can be returned to you at closing or can be used for extra items that are required during the buying process. However, breaching your side of the contract may result in loss of your EMD. 

Once an offer is written and signed. I will send your offer to the listing agent of the seller and he/she will present your offer to the owner of the home. This is when the first set of negotiations start. The owner can do one of three things – they can accept your offer, counter offer (different amount or different extras than you have asked for) or they can reject your offer. If a counter is sent back, We will meet with you to go over what the seller has proposed. Here again – you can accept, counter back to the seller or reject their counter offer. 

Upon all parties accepting (sellers and you), the contract becomes “ratified”. Once a contract is “ratified” there are only three (3) ways that you can get out of the contract without being in default: 

– If the home is in a HOA (Home Owner’s Association) community and you do not agree with the terms of the HOA, which will provided to you, you can back out of the contract without being in default. 

– During the home inspection is preformed, if the home inspector finds something wrong with the home and you decide that the problem is too big for you to handle, you can get out of your contract without being in default. 

– Finally the lender reviews, everything again prior to closing, if something changes in your credit file, the lender may decide it can no longer fund your loan. It is always a good idea to hold off on any large purchases until AFTER settlement as making a large purchase BEFORE settlement may cause you to no longer qualify for your loan. 

Home Inspections 

One of the requirements typically in a contract is a home inspection, which is typically at the buyer’s expense at the time of the inspection. Add about an addition fee for a radon inspection if you want to have radon inspected as well. Wood destroying insects and well and septic inspections, if required, are typically covered at the seller’s expense. 

Upon the completion of the home inspection a new round of negotiations may arise if their are items that will need to be repaired in order for you to consider the home acceptable. I always remind mind my clients to things about the big picture and don’t sweat the small things that arise in an inspection report. The report can be very detailed and many things are minor and should affect the love of the home. However, big items such as leaks, faulty electricity, structural damage, mold, etc., should be handled by the seller at the seller’s expense. If the inspection items are not handled to your acceptability level, then you can withdraw the offer without penalty. 

Appraisals

Lenders will arrange for an appraiser to provide an independent estimate of the value of the house you are buying. The appraiser is a member of a third party company and is not directly associated with the lender. The appraisal will let all the parties involved know that you are paying a fair price for the home. 

Once the appraisal is completed you will be notified by your lender of the value. If the value is at sales price or higher then the contract will proceed to closing. However. if the value is less than the sales price three things may occur. Either the seller agrees to reduce the sales price to match the appraised value, althernatively, you agree to pay any difference out of pocket between the appraised value and sales price, or the contract becomes void. 

Finalizing the loan

Your loan can take anywhere from 30-45 days to close after being “ratified”. As you can imagine, there is a lot of paperwork involved in buying a house. Your lender will arrange for a title company to handle all of the paperwork and make sure that the seller is the rightful owner of the house you are buying. If you need them, I can provide names of settlement companies in our area that you can choose for your closing location. 

Be prepared the lender may ask for additional or supplemental paperwork during this time. It is important to provide an additional requirements in a timely manner to make sure your loan is finalized by the closing date. 

Your lender will provide a Settlement statement, typically a few days prior to the day of closing, that will show ALL aspects of your loan. It will show you where your money is going and where the seller’s money is going as well. The settlement agent will go over this with you in detail at the time of closing. Your settlement company will have all closing documentation and we will be present with you during closing to answer any and all questions you may have pertaining to your closing packet. 

You will need to get all utilities transferred to your name effective the day of settlement. 

We will conduct a final walk thru, typically the day of settlement, to ensure that the property is still in the condition you saw at the time of contract, plus to ensure any repairs which were agreed upon at the home inspection have been completed. 

All buyers will meet at the settlement office at the designated time on the closing date to review and sign all settlement paperwork to complete the purchase of your new home, including your loan documents. At the conclusion of settlement, you will be given the keys to your new home (it is always a good idea to have locks changed if you are purchasing a “resale” home). You can now move all your belongings in and enjoy your new home!