What to expect when buying a new home
So you’ve decided that you’re ready to buy a home. This is a big decision that is full of both excitement and anxiety! We want to help educate you on the process so that you will see just how easy it is to buy a new home. Here is a run-down of the process from beginning to end.
Apply for your Mortgage Loan 1st
If you plan on getting a loan to purchase your new home, the very first thing you need to do is get pre-approved with your lender. It is very important to do this before you get too serious about looking at homes for sale. The lender will provide you with a pre-approval letter which will need to be submitted with any offer you make on a home. This makes your offer much more appealing to sellers. In fact, most sellers will require this before accepting an offer. Our Real Estate market is very competitive. When you find your dream home, you need to be ready to move fast! You need to already have your financing in place. In order to get pre-approved you will need to provide your lender with the following information:
- Copy of your driver’s license and social security card
- 2 most recent pay stubs
- 2 most recent bank statements
- 2 most recent tax returns (completed and filed, including W-2s)
- Current mortgage statement
- Copy of your most recent statement for any investments and retirement accounts
- Verification of Child Support if you receive any
- College transcripts if you have been attending school the last 2 years
- Letter of explanation in regard to any derogatory credit
- Documentation of any other source of income
Find a home and put it ‘Under Contract’
Now the fun begins! Once you have been pre-approved you are ready to start searching for homes. Make sure your agent knows all of your buying criteria. Once you fully tell them what you are looking for they will send you a list of several homes to preview online. You can scroll through the photos and listing information until you narrow it down to the homes you would like to see in person. Your agent will then make arrangements for you to see each home. When you find the home you love, your agent will prepare an offer for you to sign. This offer will be presented to the Seller. Sometimes it may be a day or two before you get a response so be patient. There may be some back-and-forth until an agreement is finally met. But that is part of the fun! Your agent will be a valuable asset to you during this process. Be prepared to write both an option and earnest money checks depending on what your contract states.
Mortgage origination and processing begins
Once you have found a home and all parties have signed the contract, loan processing will begin. Your real estate agent will send your contract to both your lender and the title company. During this time the lender will need to collect all of the above documentation to finalize your approval. It’s very important to get all the documents to your lender in a timely manner. Once all documents are collected, your file will go into underwriting and may come back with a list of requirements to satisfy the loan. The title company will begin their process of searching the title during this initial phase. Once the title search is complete, the title company will prepare a title commitment to make sure the title (deed) is clear.
This is also known as the Inspection Period. During this time you will get the house inspected. It is important to complete all your inspections as quickly as possible. This ensures that you have enough time to get estimates, ask questions, and possibly even ask the Seller to make some of these repairs. This has to be done before the Option Period expires. Once the Option Period is over, you will no longer have the opportunity to ask the Seller to make repairs. This is also the time period in which you can walk away from the deal without losing your earnest money.
Property Approval and Final Underwriting
Once the Option Period is over, the lender will order an appraisal and survey to ensure that the property meets their requirements for the loan. When the property appraisal is complete, your loan will go into final underwriting. In some cases the lender may ask you to provide them with additional information to clear up any last questions they may have. It is very important to respond to your lender’s requests as quickly as possible to keep closing on schedule. Once all the conditions are met, the lender will send final closing instructions to the title company. They will also send you a Closing Disclosure that must be signed 3 days prior to closing. Your agent, lender, and closing officer will help you through this process.
This is the day you’ve been waiting for!! You will meet your agent at the title company and sign all the final documents. Make sure you bring your ID and a cashier’s check for the funds to close. Once all parties have signed, the documents will be sent to the Lender for final review. Within a few hours the Lender will wire the money to fund the deal. After the loan funds, you will receive keys and be able to take possession of your new home!
This entire process is much easier when you have an experienced agent at your side. That’s what we are here for. It’s our job to make sure everything falls into place. Think of us as your personal Real Estate Guide! We make sure you meet all of those deadlines and that no detail is missed. The best part is that the Seller pays the listing commission if the home is listed in the Amarillo MLS (Multiple Listing Service). So you end up getting all this help at no charge!
We would love to visit with you and answer any questions you have. We can refer you to some great lenders to help you get started. We take great pride in what we do and we love helping our clients through this whole process. We want to help you find your perfect home. Call us today and let’s get started! 806-576-4005