Step 1- Getting Pre-Approved to Shopping for a Home
The BIG 3 elements in obtaining a Home Loan are :
- Credit: Knowing your credit score will not only help you but will also help your Mortgage company determine the BEST Program to fit your goals. In this area, I strongly suggest using MyFico. This company will provide you with your TRUE Credit Score that Mortgage Lenders use. Its different than the FREE systems that provide you an Advantage Score. The Advantage Score is a good educational tool but it is NOT the True Credit Score that your Mortgage Lender will be using.
- Income: Have your most recent pay stub with you along with your Previous TWO years Federal Tax Returns
- Down Payment: Your Down Payment is the amount of money that you have available to put down on the home. In most cases, you will need from 3% – 5% of a Down Payment. Gift Funds from a relative can also be used.
- Lender: Using a Mortgage Broker in most cases can get you a better Interest Rate and it will also provide you with More Options:
Step 2- Build Your Home Buying Team
- Now that you have your Financing in place you will need a Full Time Experienced Real Estate Agent.
- It is highly recommended to get a Real Estate attorney involved in the transaction to Protect you from issues such as errors in the Purchase Contract, negotiation if the home appraised value comes in less than the purchase price and also damage to the home prior to you taking possession of the home.
- A Home Inspector is not a Requirement in the home buying process but it is also highly recommended.
Step 3- Submitting Offer on Home
- Once you and your Realtor have found the Home of Your Dreams you will submit an Offer on the home. The offer is the Price that you are willing to pay for the home. It also details any items in the home that you are requesting the seller to include. The offer will also lay out a time frame on when you will be Closing on the home. The closing is the day that you show up and sign all of the loan paperwork and take possession of the home. Another section of the Contract will break down if you are seeking any Seller Concession or Home Warranty.
Step 4- Completing the Loan Process
- During this time you will work with your Lender, Processor, Insurance Agent as well as your attorney and Realtor to provide all documentation to satisfy your Loan application. Common items that you will need to provide will be:
- Two Years of Tax Returns
- Two Recent pay stubs
- Two months of Bank statements on where your Down Payment money will be coming from
- LOX Letters of explanation to things such as Credit inquiries, past due account, previous Bankruptcies, etc….
- Home Owners Insurance Binder
- A form of State or Federal ID
Step 5- CLOSING
- This is the time where all of you and your Teams Hard work pays off. You will sign all of the Loan Disclosures and become a Proud HOMEOWNER