STEP ONE – PREQUALIFICATION
Be Comfortable with your payment. Before you go looking for your dream home, get prequalified. Many times someone will fall in love with a home but not want the payment that comes along with that home. Contact a loan officer and get prequalified before you look for a home. Then when you see your dream home you can get excited knowing you can afford it.
During the prequalification process, the loan officer will ask you a few questions that will help determine your qualification. They will ask about your income, employment history, and down payment options. The loan officer will need to pull your credit and review your credit history and may ask for documentation from you to get you prequalified. Be prepared to provide the following: Most recent 2 years 1099’s, W2’s, most recent 30 days paystubs, last 2 years tax returns all pages, all schedules, and the most recent two months bank statements all pages. Once the loan officer can determine what you prequalify for, you will then receive a prequalification letter to go shopping for your home.
STEP TWO – SHOPPING FOR YOUR HOME
With your mortgage prequalification in place, you are ready to begin the search for your new home. You can either search online or contact a licensed Realtor® to help you.
Here are a few links if you would like to begin your search online:
- Search for Available Fannie Mae Owned Homes HomePath.com
- Search for Available Freddie Mac Owned Home HomeSteps.com
- Search for Available HUD Homes HUDHomestore.com
- Search the Multiple Listing Service (MLS)
STEP THREE – MAKING AN OFFER
Once you have found the right home, you will want to have your licensed Realtor® write an offer immediately. The contract will identify the property address, purchase price and the terms of purchase including amount of closing costs requested to be paid by Seller at closing. With your offer you will need to submit proof of earnest money deposit (EMD) along with your prequalification letter or proof of funds if you are paying cash.
STEP FOUR – OFFER AND ACCEPTANCE
The seller will receive your offer via the listing agent and either accept, reject or counter your offer. If there are multiple offers they will provide notification and ask all parties to submit their highest and best offer by a deadline. If your offer is accepted you will then move on to the next step and start the loan process with your lender. If your offer is countered you have an opportunity to review the new terms and either accept or reject. If your counter is rejected do not be discouraged, there are other homes on the market that you can make an offer on. It is important for you to remember that you are making an important purchase and you should be happy with the decision you make.
STEP FIVE – OPENING ESCROW
Once the Real Estate Purchase Contract is accepted, you will make your initial earnest money deposit to open escrow. The escrow company is a neutral third party. They make sure that upon the closing of escrow the property title is clear of all liens.
STEP SIX – OBTAIN A MORTGAGE
Now that your offer has been accepted you need to immediately contact your loan officer to start the process of your loan. Remember in your contract there is a close of escrow date. Meaning your loan needs to close on or before this date. It is very important that you get all required documentation to your loan officer immediately to ensure an on-time closing. Some sellers may charge a per-diem if a loan doesn’t close on time. So it is very important for you to provide everything to your loan officer as soon as possible. In addition, do not put your loan at risk by purchasing big ticket items until your loan closes. Always ask your lender before you purchase any big ticket items.
While your loan officer is working on the financing of your home, your Realtor® will work with you on arranging inspections, such as a home inspection, roof inspection and/or termite inspection. These inspections should be done within the due diligence period so if there are any problems with the property you can address them with the seller within your due diligence period.
STEP SEVEN – DATE OF CLOSING AND POSSESSION
Once your loan has funded, Title will record your Deed and you will be able to get your keys and move into your new home!
Fair Housing – It’s Your Right!
If you feel that your housing rights have been violated, you can file a fair housing complaint by calling 1-800-669-9777 or visiting www.HUD.GOV