Have you bought a house yet or are you scared of the entire process? Between the application, the house, and getting a first and second mortgage, why does this seem like a good thing?
Well, I write today to uncover some of the hidden truths behind the process. Now, I won’t lie to you. This is not a process for the impatient at heart. But I will let you know how I look at it from the perspective of a buyer as well as a banker. I was a first time homebuyer once but I have also done hundreds of mortgages and know more of the ins and outs.
The first part of the process is to figure out what you want. As simple as that sounds, many couples sometimes have a hard time narrowing down where they want to live. This is so crucial though because a RealtorÃ¢Â?Â¢ can’t help you without some idea what you are looking for. Think about what area of town you want to live in and spend a couple of weekends driving neighborhoods to see what catches your fancy. After you have done that, look for a realtor. Don’t choose the first realtor you find. Instead, talk with your friends and family and see who they have worked with. With so many RealtorsÃ¢Â?Â¢ out there, you can find a good one. Also, look at who lists and sells many of the houses within the area you want to buy. This might be an agent you may want to contact since he or she knows the area very well and is highly productive. The realtor will want an idea what you can afford and may push you towards a mortgage broker. You don’t have to do this. You can decide where you want to do the mortgage.
The next part is the mortgage application. Here is where you will need to start digging through the files at home. The documents the mortgage broker will most likely ask for are:
Last 2 paychecks or paycheck stubs
2-3 months worth of bank statements
2 years of tax returns
Purchase agreement of house you want to buy
Past 2 years of living history Retirement accounts (sometimes)
The mortgage broker needs the information to get a sense of your debts as well as to see how you stand financially. All this information must be given to the mortgage broker before the loan can be closed down the road. Some buyers prefer to start the house seeking process going for the mortgage and then the RealtorÃ¢Â?Â¢ next. This is up to you. By doing the mortgage application first, buyers are pre-approved and know how much house that they can afford so it gives them a better idea whether they can afford what they want.
Now comes the fun part. Find that house! Let the RealtorÃ¢Â?Â¢ do his job and find some houses you may have overlooked while driving around on the weekends. Once you have found the house of your dreams, you will need to put in your offer. You need to be creative for this as the seller almost always will not automatically accept your offer but come back with his own offer, known as a counteroffer. Work to bridge the gap between the two sides and you will have a deal ready to go. Once this is done, you are nearing the home stretch. There shouldn’t be much left that you have to do.
You are in the homestretch! The offer has been accepted and the mortgage approved. It’s almost time to close. Not much is left from your end. You need to make sure the house is fine to live in though. This is when a home inspection and termite inspection come into play. These are important to see that you are buying a house in good shape. The mortgage broker will also be ordering a title report to make sure that the seller is not selling you a house with many obligations to pay off as well.
Hurray, we are done! The last thing is closing. Give your hand a good rest as you will need to sign a lot of documents during the closing. Once it’s finished, it is your house. You get the keys on the day decided between you and the seller earlier. Have fun in your new house.
I hope that this shows you the process is long but very manageable. Now is a great time to buy property since it is a buyer’s market. Good Luck!