Loan pre-approval: This is the beginning of your home purchasing process. The initial cost is usually nothing. Although a fair amount of work is necessary for the pre-approval, all of the loan fees are charged at the closing of your new home or in the case of a refinance the closing of your loan. The only time a fee would be charged if your home or loan did not close would be if an appraisal had been completed. The appraiser is independent from the mortgage company and is paid even if the loan does not close. The pre-approval process involves yourself or your loan agent, in person or over the phone completing a loan application. This is submitted with your credit report, income and savings information to an underwriter to see how much you can qualify for. This will let you know before you have made an offer on a home how much you qualify for, if you have any unknown issues that might make your home purchase difficult. This will also let any prospective home seller know that you have done your homework and have no issues that will slow your financing and home purchase. This pre-approval process can be done after finding a home but if unforeseen issues come up in the financing process the seller may be more likely to pull out if the process runs to long or not accept an offer until a pre-approval has been completed. The Underwriter may also issue a conditional approval indicating that additional information is needed to complete the loan and may be submitted later for final loan approval with an appraisal and title report when you have found a suitable property. [back to top]
Finding a home: When you have found a Realtor that you like, you will then find a home that you like and make an offer (purchase and sale agreement) to the seller. When the offer is accepted you are going to be asked to put up an earnest money deposit showing good faith toward the purchase of the home. [back to top]
Inspecting your home: Once you have a signed and excepted contract to purchase your new home, you will want to have a structural inspection completed as soon as possible. This inspector will go over the new home in detail and give you a written report point out any structural, mechanical or functional problems. The inspector will check the roof, hot water heater, furnace, kitchen appliances, plumbing and electrical systems (to name a few) and let you know what shape they are in and sometimes how long before they need to be replaced. The inspection should also include any structural, drainage and/pest problems. You should also have a list of your concerns to bring up to inspector for special attention and explanation. The inspector is working for you so you need to know up front what you will receive and make sure that will meet all of your needs. This report should tell you all you need to know in order to make an informed decision to purchase the home or maybe search for another that better meets your needs. [back to top]
Completing the loan process: When you have completed your inspection to your satisfaction you will inform your Loan Agent that you are satisfied with the property and are ready to proceed. At this point your loan agent will order your title report if it has not already been done and order the appraisal which will have to be paid by the party making the offer to buy the property even if the transaction does not close. [back to top]
Final loan approval: When the appraisal and title report are complete the loan agent will submit these with any additional item requested by the underwriter for final loan approval. [back to top]
Final loan documents and closing: When final loan approval has been completed the loan agent will order the loan documents to be sent to the closing agent for final preparation of all of the final facts and figures. The closing agent will then contact the buyer and seller to make appointments and sign the final loan documents. The signed documents will be sent back to the lender and if everything is in order the loan company will release the loan funds to the closing agent needed to buy the new home. When the funds have been received by the closing agent the funds will be disbursed to the appropriate parties and the final sale will be recorded at the court house. The Purchase and Sale is now complete and the new owners can move into their new property on the date agreed to in the purchase and sale contract. [back to top] |
