So, you’re ready to take the ultimate step and buy your own home. Whether you are buying a single-family home, condo or townhouse here are a couple of tips that will help you get the home of your dreams and take away some of the stress with the purchase of a home.
Let sellers know you are ready, willing and financially prepared by getting pre-approved by a mortgage lender/bank before going out to see homes. When you apply for a loan, you have four options to have your credit reviewed , let’s take a look at your choices:
- Pre-Qualification without credit review – during this phase the buyers have talked to a mortgage lender/bank about purchasing a home. The lender relies only on what the potential borrower tells them about their income, assets, employment, debts and other financial information. The credit report is not reviewed.
- Pre-Qualification with credit review – during this phase the buyers have talked to a mortgage lender/bank about purchasing a home and the credit report has been pulled however there is no official verification of income, assets or employment. If a pre-approval letter is given during this process potential problems may arise leading to additional documentation requirements and/or the loss of the loan.
- Pre-approval without Underwriting Review – during this phase the buyers have talked to a mortgage lender/bank about purchasing a home, credit report has been pulled, income, employment and asset documentation have been reviewed by the lender. Following this step, the lender will send your information through an automated underwriting system. There is still potential for errors because the live underwriter has not seen or reviewed your application and documentation. Most lenders feel good about this option but trouble can still arise.
- Notice of Loan Approval (NOLA) – the best and most accurate way – during this phase the buyers have talked to a mortgage lender/bank about purchasing a home, the loan application and all of the documentation have been reviewed by the live underwriter and a notice of loan approval (NOLA) have been issued by the underwriter to the buyer.
Once you have your notice of loan approval letter the next step is to contact a Realtor to set up an appointment to discuss the location and features of your new home. Where do you want to live, how many bedrooms, how many bathrooms and any other features you would like to have in your new home should be discussed at this time. Remember to consider your budget and don’t over extend yourself.
Don’t go shopping for a home by yourself. Your Realtor provides you with their education and experience with the home buying process. Your Realtor will act as buffers between you and all the sharks out there that want to take advantage of you with reasons why you should buy their house even though it’s in Alaska and you want to live in California.
Meet with your Realtor and all decision makers who will be involved in the home buying process. Your Realtor will provide information to everyone at the same time so everyone is on the same page. Take everyone involve with you when you go out to look at homes. This helps when you need to make an offer quickly on a hot property that just came on the market. Don’t waste time going back and forth or the home will be gone.
Commit to working diligently with one Realtor. Don’t Realtor hop. This can lead to confusion and a delay in the home buying process. If you are approached by another Realtor, kindly inform them you are working with a Realtor already and give them your Realtors business card.
Finally have funds available with easy access when needed for the following items:
- Initial deposit – this is the good faith money to be sent within three days after your offer is accepted and escrow is opened.
- Appraisal – this could be paid in escrow or outside of escrow depending on your financial institution where you are obtaining your loan.
- Buyers home inspection – After your offer is accepted you will have to option to have a home inspection completed. This is something that you will and want to pay for within the allowed time frame.
- Down payment – this is the amount of money you and your lender have agreed for you to put down on the home to secure your loan
- Closing costs – this is the amount of money you will pay to escrow along with your down payment for the cost of escrow, title and various other fees that is included in your closing costs.
Following the tips outlined here will make your buying experience less stressful and will help you to find the home of your dreams. For more information about the home buying process click here and leave your contact information. Click here to search for homes in your area.
Theresa Miller, Broker, Realtor, CEO
We are Leroy & Theresa Miller with The M & M Team Realty. We are Residential Realtors working with clients to purchase, sell or lease. We specialize in clients who need to sell or purchase property due to life changing events (i.e. a divorce). We understand the urgency and sensitivity of the clients needs.
We are The M & M Team Realty, “The Answer to Your Life Changing Events”
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