Most real estate professionals and mortgage lenders recommend pre-qualifying for a loan before selecting a home to purchase. This process will help you determine the price range you can afford, understand the types of loans you qualify for, determine what your monthly payment will be and estimate the down payment and closing costs.
The Loan Process
Your Realtor can help you select a mortgage lender. Once you have made your decision, these are the steps of the process:
All pertinent documentation is obtained. Fees and down payments are discussed, and the borrower will receive a Loan Estimate
itemizing the rates and associated costs for the loan.You will be asked to provide certain documents to your lender in order that your loan can be processed in a timely manner.
Once all the necessary documentation is in, your completed file is submitted to a lender for approval.
Loan Approval (Underwriting)
Loan approval, or underwriting, generally takes 24 to 72 hours. All parties are notified of the approval and any loan conditions that must be received before the loan can close.
Once all parties have signed the loan documents, they are returned to the lender. If all the forms have been properly executed, the lender sends the loan funds by wire transfer. At this point, the borrower finishes the loan process and actually buys the house.
Finding and Choosing the Right Home
Based on criteria that you establish, your Realtor will help you find the perfect home. There are many factors to consider in selecting a property, including location, bedroom and bath count, schools and amenities. Make sure you select a knowledgable Realtor who is going to work for you. A good Realtor will apply my extensive community knowledge and professional resources to research available properties, and show you the homes that best meet your needs. If you find a property that interests you through the Internet or your own research, let your Sales Associate know so that a showing can be arranged.
As you view different properties, your criteria may change. Open and direct communication with your Realtor is a key element of a successful property search.
Making an Offer
Once you have found the home that you wish to purchase, your Realtor will apply their professional training and do all the necessary research to help you structure an effective offer.
This is where your Realtor’s negotiation skills come into play. When an offer is made, the seller will have the option of accepting, rejecting or counter-offering. Your Sales Associate will negotiate the best possible terms for you.
Your Realtor will draft the purchase agreement, advising you of protective contingencies, customary practices, and local regulations. Home warranty, title and escrow arrangements will be detailed in the offer. Although your Sales Associate will give you advice and information, it is your decision as to the exact price and terms that you wish to offer.
Managing the Escrow
When the purchase agreement is accepted and signed by all parties, your Sales Associate will open escrow for you and your earnest money will be deposited. The escrow is a neutral third party that will receive, hold, and distribute all funds associated with your transaction.
Prior to closing escrow, all of the contingencies of the Purchase Agreement must be met. Your Realtor will coordinate this process. Typical contingencies include:
· Approval of the Seller’s Property Disclosure Statement.
· Approval of the preliminary title report.
· Loan approval, including an appraisal of the property.
· Physical inspections of the property.
· Pest inspection and certification.
· Acquisition of homeowner’s insurance.
Closing Escrow and Moving In!
When all of the conditions of the purchase agreement have been met, you will sign your loan documents and closing papers. You will deposit the balance of your down payment and closing costs to escrow and your lender will deposit the balance of the purchase price. The deed will then be recorded at the County Recorder’s office and you will take ownership of your home.
Your Realtor is a valuable source of helpful tips for planning and coordinating your move.