Here is a summary of the steps that you will take from your home search to closing. If you are a first-time home buyer, don't be overwhelmed by the number of items listed or their complexity. Your real estate agent (hopefully you'll choose us), loan officer and attorney or title company will guide you through this process. Many of the tasks are handled directly by one of these parties. You will be instructed as to exactly what you must do and when and any questions that you might have will be answered. Don't forget, we've gone through these procedures many times before.
Using the loan and pre-qualification functions in the Homebuyer's Consultant Software, determine the price range of the home that you can afford. Discuss this with your real estate agent. Ask him or her to show you houses in this range in the communities that you would like to live in. Your agent is a good source for inside information on the benefits of the communities in his or her area. For the most part, you should count on spending 2 to 4 weeks looking at homes with your real estate agent. This will give you enough time to look at plenty of homes and make your decision. If you take longer than a month, you risk the chance of loosing a home that you would have liked to make an offer on, and you'll have to start the process again.
When you find a home that you want to purchase, the next thing you do is make an offer through your real estate agent. Your agent will provide you with a standard residential sales contract. He or she can also recommend a good real estate attorney. An attorney may or may not be necessary at this point, (most sales contracts are fairly standard) but will be required later in the process. However, you may decide that you want an attorney to review the contract.
Have the home inspected by a professional, bonded inspector. (NOTE: The buyer normally pays for the home inspection - it will run somewhere in the area of $200 - $500.) The home inspection usually takes place within 5 days after signing the contract. If there are any major flaws in the home, they can be dealt with before you apply for the mortgage. If these issues can not be dealt with to the satisfaction of the buyer, your contract should allow you to back out at this time.
Apply for a mortgage. You will probably have to pay a loan application fee of $100 to $300. Some lenders also charge you prepaid points. (One point refers to 1% of the loan amount. Points are paid to the lender or mortgage company to cover their cost for the up front processing of the loan.) You may decide to "lock in" the rate at this time, or the lender may allow you to do it at a later point in time. (If you have been pre-approved for a loan, some of the steps in this process will have already been completed.)
When you apply for a mortgage, what are some of the items that are needed? (These may vary depending on the lender.)
You will receive a "good faith" estimate of the closing costs from the lender which will include the costs for: points, appraisal, title search, title insurance, survey, recording of deeds and the bank's attorney fees. Some of these items may be included in the points that they charge.
At this time, there are several other items that may need to be done before the lender gives final approval to the mortgage:
With the exception of the homeowner's insurance, all of the above costs plus any additional ones such as the appraisal, survey, recording of deeds and the bank's attorney fees will be included in the RESPA provided by the lender. The entire cost to you, the buyer, will usually be in the range of $1,000 to $1,500 excluding points. (The actual amount may be higher or lower than these limits.) The amount of points that you will have to pay depends on the lender's policies, the amount of your down payment, the term and the amount of the mortgage.
If your mortgage is approved, the lender will send you a letter of commitment. If the following information is not provided, you will request an exact accounting of the closing or settlement costs and the required documents that you will need to bring to the closing.
All of the parties will agree on a closing date. For the closing, here is a list of some of the items that the three parties are responsible to bring.
You will select a walkthrough date. This is your opportunity to inspect the home one last time before closing. It is usually scheduled a day or two before the closing date.
CONGRATULATIONS! Closing day has arrived. After signing numerous documents and taking care of final payments, you will become the proud owners of your own home.
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