Home Purchase Mortgage Process For First-Time Homebuyers
This guide covers home purchase mortgage process for first-time homebuyers. Starting home purchase mortgage process: The first thing you want to do is contact one of us for your pre-approval. We can let the loan officer know if you are ready now or you might need to work on a few things. When you call us there are 3 major things we will need to know. First is how is credit, credit scores, credit payment history.
Credit is one of the most important things a Loan Officer will go over with borrowers. If the credit score is too low we will assist on how to get scores maximized.
If the debt is high we will advise you on what to pay off. If you have Bankruptcies or Foreclosures we will let you know of important dates we may have to wait for. So this is the first step and most important. Once we have established that your credit is ok we will discuss income and what is usable and what is not. In this article, we will discuss and cover home purchase mortgage process for first-time homebuyers.
Income and Employment in The Home Purchase Mortgage Process
W2 income is always the easiest: We can usually go of your current salary and your past income doesn’t matter. If you have overtime, bonuses or self-employed we need to average income. Plus we need to determine a 2-year job history. So this step is sometimes complicated and you may not make as much qualifying income as you might think.
How The Home Purchase Mortgage Process Works
The home purchase mortgage process for first-time homebuyers typically involves several key steps: Assessing Your Finances should be the very first step of the home purchase mortgage process: Understand your financial situation, including your credit score, income, debts, and savings for a down payment and closing costs.
Get qualified and pre-approved for a mortgage. A loan officer will review your income docs and credit report to determine how much you qualify for and at what interest rate.
Work with an experienced real estate agent knowledgeable in the area and can help you find properties within your budget and preferences. Begin searching for properties that suit your criteria and price range. Attending open houses and scheduling viewings with your real estate agent is part of the home-buying mortgage process. Once you find a home you like, your real estate agent will assist and coordinate the offer with the seller’s realtor. Negotiate the purchase price and terms of the sale. Click here to get more information about purchase mortgage process works.
Finding The House You Want To Purchase
After your real estate purchase offer is accepted, the next step before a home appraisal would be to schedule a home inspection to identify any potential issues with the property. Once your offer is accepted and the inspection is satisfactory, formally apply for your mortgage loan. You’ll need to provide additional documentation to the lender at this stage.
Mortgage Processing and Underwriting
The lender will review your application, documentation, and property. This process can take several weeks as they assess your lending risk. The lender will schedule a home appraisal to determine the property’s fair market value. Home appraisal is mandatory for the lender. This ensures that the property is worth the amount you’re borrowing.
After the mortgage underwriter has approved your mortgage loanand a clear-to-close issue has been identified, the closing department of the lender will schedule the home closing.
If everything checks out, you’ll schedule a closing date where the buyers and sellers meet at a title company. You’ll sign all the necessary paperwork at closing, pay any remaining closing costs and fees, and officially take ownership of the home. Moving In: Congratulations!
Verified And Qualified Funds For Home Purchase Mortgage Process
After we have credit and income squared away we then discuss how much money you have for the down payment, closing costs and reserves: A good rule of thumb is you must have 3.5% in the bank of clean funds. This means no odd deposits like cash or friend paid you back some money you lent them. If you don’t have the 3.5% you can get a gift. In general the more money you have the easier the approval process will be. Closing cost can be $7,000. If you cannot come up with this I always recommend asking realtor ask for seller concession credit for this from the seller. Finally, we can now write you a pre-approval after all these issues are addressed.
Starting Home Purchase Mortgage Process With Solid Pre-Approval
Now you go out with your realtor with our pre approval and purchase your home. When you have a contract then what we need to do is package up all the documents that verify your job history, credit, income and assets. We package this up and submit to one of our underwriters. While the underwriter is reviewing these documents we order the appraisal, title and homeowners insurance. When the underwriter approves you they will give us a list of conditions to satisfy. Conditions are a list of more paperwork clarifying your financial and credit history. When we submit all conditions, appraisal, title, and insurance we are now in review for a clear to close. These are my favorite words. This means we can close in 3 days and we are done.
Moving in To Your New Home
Once the closing process is complete, you can move into your new home. Throughout this process, staying in close communication with your mortgage lender, real estate agent, and other professionals is essential to ensure a smooth transaction. As a first-time homebuyer, consider attending homebuyer education courses or workshops better to understand the process and your responsibilities as a homeowner.
Click here to get more information about purchase mortgage process works.
This BLOG On Home Purchase Mortgage Process Was UPDATED And PUBLISHED on February 27th, 2024
