11/19/2019 | News release | Distributed by Public on 11/19/2019 11:26
What to know when buying a house? Buying a house may sound complicated - and while there are several steps and moving pieces - the process to buy a house is actually pretty straightforward.
Shop for a mortgage lender
After you've decided buying a house is right for you, it's time to shop for a lender. We recommend learning common mortgage terms, attending a first-time homebuyer seminar and asking your friends and family that have recently bought homes about their experiences. After you've identified some potential lenders, it's a good idea to get at least three different financing quotes from local lenders to consider.
Apply for credit
After you've obtained different quotes for financing, it's time to start the loan application process. Each lender's requirements for applying for a home loan are a little different, but here's how the process usually works:
Receive a credit approval document (if applicable)
A credit approval letter or document provides basic information to help you move onto the next step of buying a home; this document includes your maximum loan amount based on your qualifications, term of the loan, and/or mortgage type and the expiration date of the credit approval (usually 60 days). Every lender's credit approval process is different, so some will have different conditions than others. For example, some may require a recent paystub or other documentation.
Credit approval processes and requirements vary by lender, but most realtors will require that a borrower receive some type of credit approval before they shop for a home. This lets all parties involved in the transaction know what type of mortgage money that you, the buyer, are approved to borrow. (Read our post 'How does a lender decide to approve a home loan?' for more details about the process.)
Select a realtor or broker
How do you decide which realtor to work with when buying a home? Interview at least three realtors using the following sample criteria:
Negotiate a purchase and sale agreement
An experienced realtor should be able to help you navigate this important step. In general, you'll want to consider the purchase price, the closing date and earnest money deposited when making an offer.
Inspect your home
Why the need for an inspection? As a buyer, you want to be sure you're getting what you paid for and sellers want to be sure they're in the clear if problems arise after the home was sold. Unless you agree to different terms, in general, the buyer pays for the home inspection of the exterior and interior of the house. Home inspectors are licensed and/or certified by state or local associations and their report may result in additional negotiations. In general, we recommend never waiving the inspection contingency. (The risk of not uncovering potential repair issues or defects is not worth a short-term savings of time or negotiating advantage.)
Complete the final steps from your mortgage lender
This typically includes a deposit to cover the cost association with the processing of the loan application, the appraisal of the property, title insurance and flood certificate. Depending on the lender's process, you'll also usually lock in your interest rate and firm up any underwriting steps and a transfer of funds through escrow.
If you're thinking about buying or selling your home, we're here to help. We've been specializing in helping people achieve their home ownership dreams for over 100 years. To find out more, contact one of our neighborhood branch managers or call us at 800-324-9375.