The Process of Buying Your First Home
Buying your very first home tends to be an exciting process yet it’s also a definite nerve-tester. Not surprisingly, it is among the largest financial transactions you will do in your lifetime and if you’re not comfortable or using an experienced loan originator to guide you, it can be somewhat overwhelming.
Being familiar with the steps required will help you get through to the finish and receive the keys to your house. The following is a helpful checklist that will help you move in the right direction at a comfortable pace.
Find out how much loan you’re qualified for
Getting pre-qualified for a mortgage by a loan originator will enable you to figure out how much you can afford based on your current debts and income.
Credit Score
Your credit score and number of credit accounts is another component in determining your interest rate because your past payment history and the amount of your debt balances prove to be crucial in maximum loan amounts.
Before applying for a home loan be certain that you all of your credit accounts have been paid on time and don’t carry a balance that is more than 50% of the maximum credit. If you discover errors on your credit report payments but you know your payment history is outstanding, it is in your best interest to contact a credit repair agency to get it corrected.
Employment, Income & Debts
Your loan originator will require your job history for the last two years, your position, and your monthly income. How much you qualify for will be based on what your monthly debt to income ratio is by a loan officer.
The formula is simple. It just takes your current monthly income divided by your debts on your credit report. Keep in mind your actual monthly income may differ from what you think it is.
Savings
In addition to your income, debt, and credit history, your loan officer will have to confirm the amount of money you have available to satisfy the closing costs, reserves, and down payment. In regards to down payment, it is predicated upon the kind of loan you will get. As of today, down payments range from 3-percent to 20 percent.
Connect with a Real Estate Agent
A good real estate agent can provide you with their expertise of the local market and give you confidence about your new home. The confidence comes from your agent using all of their resources to locate the right home and for the right price.
Your agent will negotiate the price, and the closing costs paid by the seller. You will be guided step-by-step through the home buying process and your loan originator will be there as well.
Making an Offer
When you and your agent find the ideal home, the next step is to make an offer. The price you ultimately offer the seller is determined by your real estate agent and should be fair for all parties.
They’ll help you understand the type of market we’re in such as how long the home been listed, prices of comparable homes in the neighborhood, whether we’re in a buyer’s or seller’s market and other factors.
Submit Your Mortgage Application
Once your offer is accepted, you will need to submit your loan application to your loan officer or mortgage broker. Bear in mind, your pre-qualification or pre-approval was only to figure out the maximum loan amount you can afford.
With an actual address, there’s more documentation apart from your income, employment, and credit that needs to be examined by the underwriter in order to successfully close the transaction with financing. The following items fall into that category.
• Title report on the property
• HOA financial statements, if applicable
• Appraisal
Closing date for your home
See to it that you are comfortable with how much your closing costs will be and the documents you’ll be signing in advance. You should know one to three days before your closing appointment to sign final loan documents. Make sure any credit promised to you are applied on your closing disclosure document.
Congratulations, you are now a homeowner! 1st Nationwide Mortgage would really like to assist you to buy your home. Get in touch with one of our professionals to guide you in financing your home
Scott is a Business Development Manager at 1stNWM. He blogs about home loans, personal finance and lives in Orange County, CA. He feels good about sharing his expertise and real world stories of successful real estate transactions. when he’s not at work, he is with his bestie, a four-legged furry and often sloberring Saint Bernard, Wyatt.