The Fifteen Steps To Buying A Home
We encourage you to get a pre-qualification for a home loan before looking for a house. Being pre-qualified gives you an idea of how much you can afford, based on your income, debt and credit history. In addition, the lender will provide you with a pre-qualification letter, which you can use to show any seller that you are qualified to purchase a home.
2. The Hunt
Now that you know how much home you can afford, start looking for your perfect dream home. You may want to start by going to www.NorthAtlantaHomeTeam.com, as it contains every home for sale in the MLS, updated on a daily basis. You may also want to reach out to Brad or Deborah Weiner, your local RE/MAX real estate agent, to search the MLS daily for homes that meet your requirement.
3. Purchase & Sales Agreement
When you find the right home, the terms of sale are negotiated by your real estate agent, including the sales price, repair requests, move in date, etc. Your real estate agent will present all offers to the sellers. Your Pre-Qualification letter will be submitted with your offer since it can tilt the sale in your favor, especially in a competitive market. Typically, once you have an accepted offer, you will be required to provide an “Earnest Money or Good Faith” deposit. This is typically 1% of the purchase price and is held in escrow by your agent. This money gets applied toward your down payment when you are ready to close on the home and take possession.
4. Loan Application
Once the seller accepts your offer, you will need to start the process of obtaining your mortgage. You will need to complete a loan application with your preferred lender. Typically, your real estate agent can provide a solid lender referral, as they have experience working with these lenders and can usually recommend one who provides a competitive rate coupled with great service.
If, after receiving a Good Faith Estimate (GFE) from your lender, paperwork supporting the application must be submitted. Your lender may request pay stubs, tax returns and bank account statements verifying the source of the down payment, funds to close and reserves for property tax and homeowners insurance.
Lenders require an appraisal on all home sales. The lender will have an independent appraiser come out to the home and provide a value analysis based on recent homes sales and comparables in the neighborhood. This insures you are not overpaying for your home and provides the lender a third party verification of the value of the home.
7. Property Inspection
Most purchase loans require an inspection for termite and water damages as well as possible safety hazards. Some items in the home may need to be repaired, usually at the seller expense, before finalizing the sale.
8. Title Search
This is the time when a search for any loans or liens against the property is conducted. A lien may have been placed on a property to insure payment of outstanding debts by the seller. All liens must be cleared by the seller before a title transfer or “closing” can be completed.
9. Processor’s Review
A loan processor will package all pertinent information to be sent to the underwriter, including any explanations that may needed, such as reasons for derogatory credit.
10. Underwriter’s Review
Based on the information put together by both the loan officer and the processor, the underwriter makes the final decision on whether or not the loan is approved. Lender’s are looking for borrower’s who will make their payments on time and for a property that will cover the cost of the investment, if a buyer defaults.
11. Mortgage Insurance
Many lenders require borrowers to carry private mortgage insurance when their down payment is less than 20 percent of the homes sales price. Based on your credit score, there are now many programs available for as little as 3% down that don’t require mortgage insurance. Brad and Deborah Weiner of the North Atlanta Home Team can direct you to a lender with these types of programs.
12. Final Loan Approval
In most cases, when your credit and debt to income is good, you loan will be approved with little or no problem. In addition, if the property appraises for less than the purchase price, your real estate agent will request “An Amendment to Reduce Sales Price” and send that to the seller along with a copy of the recent appraisal. This can become a negotiation as the seller may not choose to reduce the selling price, allowing the buyer to terminate the agreement with full return of the earnest money deposit, if the two parties can’t come to terms.
Lenders require fire and hazard insurance on the replacement value of the structure. This insurance is typically placed in an escrow account where you are making your mortgage payments and is usually included in your total monthly payment. This insurance is set up prior to the close of your new home.
Final loan and escrow documents are signed by you (the buyer) and the seller at a title attorney’s office. Once all documents are signed and the loan is funded, you typically take possession of the home at this time.
15. Move In!
Now you get to move into your new home!
Brought To You By The Weiner Group And North Atlanta Home Team LLC