Buying your first home in Sacramento can be exciting and frustrating. But it doesn't have to be frustrating if we work together. Where do you begin?
When it's time to talk to a lender about getting a home loan, many first time home buyers are not sure where to begin. If you know what to expect, you can be well prepared, and save yourself from a lot of headaches along the way.
What documents are needed?
During the initial interview and loan application, I'll ask questions to see if there are any potential challenges that may need to be addressed during the underwriting process. Being prepared up front will eliminate having last minute items or verifications called for that wiil hold up funding your home loan.
- Income (Verification)
- Employment History
- Credit Obligations
- Residence History
- Marital Status (If divorced, court documents will be needed.)
- Cash on Hand (Source of down payment and seasoning.)
Processing the information.
Processing the loan file begins with verification of documentation on the application. We have to receive verification back from your employer, etc. If there are any items on your job history or credit report that need an explanation letter or to be paid it needs to be done before the file can go to underwriting for approval. If asked to provide a letter or show proof the that the item has been paid, provide it as soon as possible.
The underwriter will flag any item that has not been properly addressed. The goal is the fewer conditions from underwriting the better. No conditions would be perfect.
How long will the whole process take?
Title search must be performed and report sent to lender for review. This usually takes a few days. If there are no items that need to be cleared, then we are good to go.
Then there is the appraisal which could take a few days or a week depending on the appraiser's schedule. The appraiser is a separate third party. If the subject property appraises at or above the purchase price, we can proceed.
The time frame from loan application to funding depends on how long it takes to get ALL of the documentation together - submit to underwriting for approval, handle any conditions that the underwriter places on the file, order loan documents to be sent to title, sign documents, documents sent back to lender to approve signatures, records at county recorders office, releases funds. You get your keys!
The shortest time I've ever taken a loan application from start to finish was 8 days. That is not the norm. It's possible if we have everything we need and can submit the file and get it approved, however the normal time frame is around 30 days. It can always be shorter or longer depending on completion of the items I listed above.
The better prepared we are to get all items processed on time, the easier your experience will be.
Next I'll talk about locking interest rates, how your credit affects your interest rate, also, payments, taxes and insurance.
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