If you are thinking of buying a home this year, the interest rates and home prices are even better than they have ever been. Now is the time to begin the home buying process.
Here are four steps to make this process workable and easy for you.
- Choose a financing program.
- Find a home you feel you can afford.
- Negotiate the transaction through your real estate agent.
- Conclude the process through closing.
The first important step is to meet with a lender to be approved for a mortgage loan. You will need to gather your last 2 years income tax returns, W-2 forms, pay stubs for the most recent period, bank statements, and information abourt your current obligations.
Depending on your situation, you also may need to bring a copy of divorce documents, bankruptcy papers, child support payment receipts, military records, etc. Your lender will review your income and debts as well as credit history and savings to determine your qualification for a mortgage loan. There are several programs available to assist prospective homeowners, including those with little savings or perhaps past credit problems.
Being preapproved for a mortgage will help you set a limit on the price of the home to avoid looking for a home you cannot yet afford.
Your lender will review your credit report with you and help you determine if there are any accounts that need to be paid off or cleared up. Each of the three credit bureaus evaluates your credit paying history and gives you a credit "score". This score is important in the lending process. If you have high credit scores, you will be eligible for a wider choice of lending programs and sometimes better interest rates.
Your lender also will give you an estimate of closing costs and go over with you the best program to fit your situation.
After preapproval, you will want to contact a real estat agent. Your real estate agent will represent you in the negotiations with the seller and will be on your side to walk you through the process. It might be helpful to make a list of likes and dislikes for each home you see because after you have looked at several homes, it will be difficult to remember each one.
When you have found a home you want to buy, your real estate agent will write up the purchase agreement for you and will review the various inspections and reports you will want to obtain to make sure the home is in good condition. Depending upon the type of financing you are using certain inspections may be required by your lender. The contract will itemize these inspections as well as indicate the proposed closing date for the transaction.
You will want to contact your lender as soon as the offer is accepted to review any conditions needed to complete your loan and ask them to order the appraisal.
You also will want to talk with your lender about locking in an interest rate because interest rates do change daily and may have changed since your initial preapproval.
Approximately 2-3 days before you close the transaction, you will want to do a final walkthrough of your new home and make sure any repairs required by inspection or appraisal have been satisfactorily completed. Your real estate agent will take you through this part of the process.
When it time to sign closing documents, you will need to arrange to wire funds to the title company for the total amount needed. In Nevada, an out of state cashier check will hold up the recording of the deed in your name. The most efficient way is to have the funds wired to the title company. In addition to your down payment, your closing costs may be anywhere from 3 percent to 5 percent of your purchase price, depending on the loan program, interest rate and terms of the loan you have chosen. You may be able to negotiate with the seller of the home to pay some or all of the closing costs, but this should be done at the time your real estate agent writes the offer not at closing it is too late.
Allow at least an hour to review and sign documents, and ask that your lender attends your closing to answer any questions you may have and to explain the documents you are signing.
Contact your lender to start the approval process today and then call Sandra to help you start looking for the perfect home!
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