How To Buy A Home

March is here and it's the beginning of the "home buyer's" season.  Smart sellers (usually investors) are positioning their "homes for sale" to net the highest return because the real estate market is a seller's market during this time of year.  When a seller position their listings for the highest return on their investments,  you will begin to see beautiful landscaping and fresh exterior painting.  The intent is to get the exterior to make you stop, view and hopefully make an offer. 

First step to buying a home is to check your credit.  Buying a home begins with the credit, unless you are paying cash.   It's not a pleasant feeling to be financially cable to put down 3 to 5 percent only to find out you will need a minimum of 10 percent down due to collections or liens reporting on your credit report.  You've checked your credit and your scores are good now you apply for a mortgage with a lender then get a pre- approval letter.  If you do not have a lender to contact,  but you know your credit scores are good and you are financially ready for a mortgage commitment;  it's okay to contact a real estate agent, who will refer you to a mortgage lender. 

Know your credit score before you begin shopping for a home, as your score will determine 1). if you will qualify for a mortgage loan, 2). what type of mortgage program you will qualify for and  3).at what interest rate.  That three digit credit score will determine your monthly mortgage payments. 

For a conventional loan and a government loan such as FHA or VA, your monthly mortgage payments will include PITI ( principle, interest, taxes, and insurance ).   Your credit score will determine "I" or the interest you will repay on a mortgage loan.

After you have your pre approval letter, don't begin searching for a home unless you have a "buyers agent" working just for you,  that includes searching for a new home in new subdivisions.    After you've selected your new home and your offer has been accepted, you're now under contract. 

I'm Under Contract, Now What?


So you went searching for a new home with your agent, you found that dream home, you made an offer and your offer was accepted, Congratulations...you're under contract, now what?   Now it's time to perform to the terms of your contract.   This is when a good 'buyers agent" comes in handy.  The job of your agent is to ensure that you're performing (as the buyer)  so you don't loose your earnest money.  That's correct,  a Purchase and Sales Agreement is a legal instrument in which all parties have a job to do.  The seller have a job, the buyer have a job and all prospective agents have their jobs as well as the lender.  Your agent (the buyer's agent)  will be in correspondence with the seller's agent and your mortgage lender to ensure everyone is on the same page and to address your concerns or issues.




THE MORTGAGE PROCESS FOR BUYING A HOME

The mortgage process could be stressful if you're not organized.  The loan officer, mortgage banker or credit union will request certain documents once you begin your mortgage loan.  The documents you will  need are 1).bank statements, 2). paystubs 3). W2's  for the past two years or 1099's (if self employed). If you are a contracted employee such as a teacher or a physician; etc.,  you will need to provide the contract between you and your employer.  Some lender will request tax returns for the past two years, if you have not filed your returns;  most likely you will have to file before beginning the loan application.

GO TO CLOSING AND GET THE KEYS

During your "under contract" period and everyone's job is completed; all parties to the contract are waiting for three very important words... "clear to close".   That means you have completed the lender's underwriting process successfully and you have a date to go to closing.  The lender and closing attorney's will inform you of everything you will need to bring to closing. They will usually email you instructions or relay them thru your buyer's agent.  The most important thing to take is a legal form of ID such as your drivers license.  If you have not already wired the closing attorney's the amount of money you need to close,  have your "buyer's agent" to ensure it's ok for you to take certified funds to closing (usually made payable to the closing attorney). 

So, buying a home is not hard nor complicated when you follow these important steps

1. Check Your Credit

2. Gather your documents

3. Apply for a mortgage loan and get a pre approval letter

4. Work with a buyer's agent who will be there from "contract to closing"

5. Go to the closing table.

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