Credit scores play a crucial role in mortgage approvals. It's wise to check your credit before diving into the process. You need to confirm two things: (1) your credit score meets loan requirements and (2) your credit report is error-free to avoid mortgage application hiccups.
While some loan programs accept FICO scores as low as 500, we suggest aiming for 640+ to streamline your loan application process.
Prior to meeting a loan officer, it's wise to estimate your potential qualification amount and anticipated expenses. Our calculator can assist in determining your maximum purchase price and optimal monthly payments. It employs the same calculations used by loan officers to assess your maximum loan amount. CALCULATOR.
Credit agencies share your data with lenders, leading to numerous calls during mortgage applications. Neither we nor other lenders can prevent this.
To limit these unwanted calls, sign up on optoutprescreen.com and donotcall.gov. These services can help reduce the amount of spam you might receive.
Getting pre-approved is crucial before house hunting. Why? It prevents you from eyeing homes beyond your budget, which can be disappointing!
Pre-approval involves submitting a loan application with financial documents (like paystubs and tax returns) to a lender. They'll then determine your maximum purchase price and outline loan terms, including down payment, interest rates, and fees.
We have helpful Loan Officers ready to help you get started. Click here to connect with a loan officer.
After pre-approval, you'll know your budget limits. Next, choose a real estate agent to help you navigate the process and negotiate with sellers. They'll be your guide through the home-buying journey. If you need help finding a good agent, just ask us. We can suggest someone from our network of trusted professionals we've worked with before.
Your realtor can assist in finding homes that match your criteria. Begin by determining your desired number of bedrooms, budget range, preferred school district, and other key factors to refine your search. These details will help narrow down options. Your agent can arrange viewings, allowing you to explore potential homes in person before submitting an offer. This process helps you get a feel for properties and make informed decisions about which homes might be the right fit for you.
After finding your dream home, it's time to make an offer! This involves a purchase contract, typically a 10-page document outlining the sale terms. You'll suggest conditions like price, closing date, and inspection details. The seller may accept, decline, or counter your proposal. The goal is to reach a mutually agreeable arrangement on the sale terms. This back-and-forth negotiation process allows both parties to discuss and settle on the specifics of the transaction.
Buying a house only to discover costly hidden problems is a nightmare! While optional, a home inspection offers buyers crucial expert insight into a property's condition before finalizing the purchase.
Most purchase contracts include an inspection contingency period (verify with your realtor). This window allows you to walk away from the deal or ask the seller to address issues if the inspector uncovers expensive problems you're not comfortable handling.
Now it's time to plan your move. Check your purchase contract for the closing date, which you agreed on when making your offer. Think about when you'll leave your current home and move into the new one.
Remember, if you're a renter, you probably need to give your landlord advance notice.
Many agreements include an earnest money deposit. This requires the buyer to put a sum of money (agreed upon in the contract) into an escrow account shortly after both parties sign the contract.
It demonstrates to the seller how committed you are to buying the property and provides a financial guarantee that you'll stick to the agreement. It's not a cost, but rather funds held by a neutral third party that are returned to you after you finalize the home purchase.
Your lender's pre-approval likely covered most of the information required for your loan approval. However, it's common for them to request additional details or documents to finalize the process.
These requests often include recent pay stubs, updated bank statements, and specific paperwork such as child support documentation.
Every lender is legally required to send you a Loan Estimate within 3 business days after you're under contract for a home and have completed an application.
This document provides an estimate of all the costs involved in purchasing your home, not just those charged by the lender. It includes fees from various parties, such as insurance, title work, county fees, transfer taxes, lender fees, and appraisals. The Loan Estimate serves as a good faith estimate from the lender to give you an overview of these expenses.
At this stage, you'll need to secure homeowner's insurance, as all lenders require it for the duration of your mortgage. You can shop around with different insurance companies to find the best policy for your needs. It may be helpful to start with the company that provides your auto insurance. Once you have an annual quote, your lender will collect the insurance payment monthly and pay your insurance company on your behalf each year.
Your lender will order an appraisal to ensure the home is worth enough to support the loan amount. Since a mortgage allows the lender to foreclose if the loan isn't repaid, the appraisal helps confirm they can recover their funds if necessary.
While the appraisal may provide you with some useful information, it primarily serves the lender’s interests. For insights on the condition of the home, it's best to rely on your home inspection. You will likely need to pay for the appraisal upfront.
Once the appraiser inspects the property, you’ll receive an appraisal report, which typically takes 1-2 weeks to complete and will show the appraised value and condition of the home.
Most contracts include an inspection contingency period, giving you a specific window of time to conduct a home inspection and request repairs.
During this period, you can often exit the contract without any penalties based on the inspection report. It's important to carefully review the report and discuss it with your real estate agent. Together, you can determine which repairs are crucial and which ones are minor. Home inspection reports often highlight numerous potential improvements—even for newly built homes.
Remember, your goal isn't to buy a flawless home, but one that suits your needs. Ultimately, you get to decide which repairs are dealbreakers for you.
Your loan officer will submit the documents you initially provided to an underwriter, who will review them to confirm that you qualify for the mortgage. This step is known as a Conditional Approval.
After this approval, the underwriter may request additional documents, which is completely normal and nothing to worry about. They may ask for updated documents, missing pages, or other verifications to finalize the process.
Your loan officer will provide you with a Closing Disclosure before closing. You may receive multiple versions, as the figures can change, similar to the Loan Estimate.
By law, the Closing Disclosure must be given to you at least 3 business days before you can close on a home. If there is a significant change, such as an increase in the APR or fees, the lender is required to re-issue the disclosure.
When you receive your Closing Disclosure, ask your loan officer if it’s final or still estimated. Compare it to your most recent Loan Estimate, and if any changes make you uncomfortable, be sure to discuss them with your loan officer.
Once you've reviewed your Closing Disclosure, you'll need to send your "Cash to Close" funds to the title company. Your loan officer will provide you with the exact amount required. Typically, lenders will ask for either a cashier’s check or a wire transfer. If the amount exceeds $10,000, a wire transfer is usually required.
Be sure to verify the wire instructions directly with the lender and/or the title company over the phone to avoid wire fraud scams. Always confirm any changes in information with your loan officer to ensure accuracy and security.
You will meet with a closing agent, and likely your real estate agent, to review and sign the final paperwork to officially close on your new home. After that, you'll receive the keys (unless your contract includes delayed occupancy), and you’ll be ready to move in!
It’s easy to overlook this step, especially after the excitement of buying a home! However, it’s crucial to save all your financial documents for future reference. Many title companies can provide you with a digital copy of the closing paperwork you signed. I highly recommend saving these in a secure, easily accessible place like Google Drive, Dropbox, or another cloud storage service, to ensure they don’t get lost.
Now you're ready to move in! It might be a good time for a fresh coat of paint, changing the locks, or replacing the batteries in smoke detectors and other safety devices. With a few quick updates, you’ll be settled in no time!
Don’t miss your important mail! After you move, it’s incredibly easy to have the post office forward your mail to your new address. You can easily set this up through the USPS by visiting their website. Here’s the link to get started: USPS Mail Forwarding.
You definitely don’t want to miss any mortgage payments, especially the first one! Your closing paperwork will include details on where and how to make your mortgage payments. Whether you prefer writing checks or setting up auto-pay, the choice is yours.
Your first mortgage payment is always due on the 1st of the month, and it typically won’t be due until at least one full calendar month after closing. For example, if you close on August 26th, your first payment won’t be due until October 1st.