Homebuying Guide

Buying your first home is a big investment. We’re here to make the process as easy as possible and keep you informed every step of the way. Whether you’re a first-time homebuyer, are buying a luxury home, or are investing in properties to build your real estate portfolio, we can help guide you through the process toward getting that new set of keys!

Steps For Buying A Home

Congratulations! You’ve decided to buy a home. Before beginning the loan process, it’s important to do your research. There are many steps involved to make sure you have a smooth and successful experience. Start by getting pre-qualified.

Pre-Qualify

What is pre-qualification?

Pre-qualification determines your ability to repay a loan based on information you provide. Your liability, asset and income information are reviewed by a licensed mortgage loan originator to establish the maximum purchase price you can afford and how much you may be able to borrow.

What are the benefits of pre-qualifying today?

Pre-qualification may establish you as a serious buyer when looking at real estate, give you an advantage over other buyers looking at the same property, and let you know what you can afford before home shopping.

Understanding Your Credit Report

Your credit score is not the only factor in getting approved for a mortgage, but it is an important part of determining what you will be able to qualify for.

Check your own credit score before meeting with a lender.

It’s important to make sure that your score is accurate when applying for a loan. You can get a free credit report once a year online by visiting annualcreditreport.com.

Verify report for accurate information.

Report and dispute inaccuracies with the credit bureau. Disputes in process may delay loan approval.

Paying down high credit balances may positively affect your credit score.

By paying down applicable lines of credit before applying for a loan, you may qualify and get approved for a better interest rate.

Set up payment plans.

Call your creditors and work out a budget-friendly payment plan on delinquent accounts prior to applying for a loan. Work out a plan that won’t harshly affect your debt-to-income ratio but will still let lenders know you are serious about being credible for your debts.

Choosing a Loan that best fits your needs

If you pre-qualified, we’ll choose a mortgage product that will meet your needs. If you want to get an idea of what kind of product may be right for you, see our loan programs.

Budget

Determine how much home you can afford, what your estimated monthly mortgage payment may be, how much your down payment should be, and more. When budgeting to plan for a mortgage, a loan originator will help you include:

monthly bills
estimated property taxes
estimated home-owner’s insurance
estimated private mortgage insurance (PMI)
living costs
potential Home Owners Association fees

In addition to ongoing costs, remember to factor in one-time costs during the buying process, including closing costs and your down payment.

Get Pre-Approved

Pre-Qualification

It determines your ability to repay a loan based on information you provide. Your liability, asset and income information are reviewed by a licensed mortgage loan originator to establish the maximum purchase price you can afford and how much you may be able to borrow.

Pre-Approval

This is a written commitment from a lender to extend a mortgage to you for a specific amount and time period.

It is important to understand the difference between pre-qualification and pre-approval. A Pre-qualification determines your ability to repay a loan based on information you provide. Your liability, asset and income information are reviewed by a licensed mortgage loan originator to establish the maximum purchase price you can afford and how much you may be able to borrow. A Pre-approval is when your information is reviewed and verified by an underwriter. This involves an analysis of your financial status and credit history. With a pre-approval, you’ll be able to negotiate your home purchase confidently. Realtors and sellers will often take your offer more seriously if you get pre-approved prior to house shopping because it lets them know you are ready to make a deal. A pre-approval may help streamline your process and result in a smoother transaction.

Start House Hunting

You have a lender and you have a realtor. Your next step will be to start looking at houses. It is easy to get carried away with the excitement of becoming a homeowner at this point. You may only be thinking about yard space, decorations and the amount of bedrooms you want, but it is important to consider all aspects of the property before moving forward.

Location is key!

Consider the crime rate, public school ratings, your daily commute, traffic patterns, and local amenities when choosing a home. If public parks, libraries, pools, sporting arenas, churches, restaurants or shopping centers are important to you, make sure you consider their proximity to your neighborhood before getting lost in visions of porch swings and curtains.

Be aware of the condition the home is in.

You may think you have found your dream home, but keep in mind any extra stress or costs that may come up when you’re learning about that crack in the wall or the furnace system from decades ago. If you’re going for a fixer-upper, make sure you have factored in time to your moving process, in addition to additional expenses.

Start The Loan Process

By now, you have an agent, you’ve gotten pre-approved, and you’ve found your dream home. It is time to start the loan process! If you need a break down of the loan process click here.

Start to gather all necessary identification and paperwork

Identity & Income Information

Your full legal name, Social Security number, and date of birth. A copy of your Social Security card may be required.
Your phone number, email address, and residential mailing addresses for the past two years.
Your primary and secondary income and sources.
Your government-issued photo ID.
All employer names, addresses, and phone numbers for the past two years.
The values of your bank, investment, and retirement accounts, as well as any other asset accounts.
Your monthly debt obligations.
The address of the property being purchased, year built, estimated down payment amount, and purchase price.
Estimates of annual property taxes, homeowners insurance, and homeowner association dues (if any).

Income Information for Self-Employed Borrowers

Your personal and business federal tax returns for the past three years.
A year-to-date profit and loss statement.
A complete list of all business debts.

Credit Information

A letter of explanation for any late payments, judgments, collections, or other derogatory credit history items.
Source of funds documentation for any large deposits on asset or bank statements.
The judicial decree or court order of each obligation due to legal action.
Bankruptcy/discharge papers for all bankruptcies in your credit history.
Payment histories for utilities, cable TV, internet, phone, auto insurance, and any other expenses.

Income & Tax Documentation

IRS Form 4506-T — request for tax transcript; must be completed, signed, and dated.
Your W-2s for the past two years.
Pay stubs for the past 30 days.
Your federal tax returns (1040s) for the past two years.
Your most recent two months’ asset and bank statements for all accounts on your application (all pages, including blank pages).
A written explanation if you have been employed less than two years or if employment gaps exist.
A purchase contract signed by all parties.
Homeowners insurance information, including the agent’s name and phone number.

These documents may not be all-inclusive, but by having these on hand, you will expedite the application.

Submit your application

Fill out and sign Form 1003 — the residential loan application — including the attached fair lending notice, loan info sheet, and credit authorization. Note: Do not use whiteout on this paperwork. Mistakes should be crossed out and initialed.

Review your Loan Estimate

This document contains important details about the loan your are applying for including estimations of your interest rate, monthly payment, closing costs, taxes, insurance and any prepayment penalties. The lender must provide this to you within three business days of receiving your application.

Review your Good Faith Estimate

This is the list of the settlement charges that you must pay at closing. The lender must provide this to you within three business days of receiving the mortgage application.

Clear any additional requests from underwriting

Underwriting is the department that reviews all of your identification, paperwork, and credit history to asses if you will qualify for the desired loan. They determine the terms of the loan and will occasionally require extra documents to fully understand your background and make their decision. It is important to make yourself available during the underwriting process and to respond to any requests promptly and thoroughly.

Review your Closing Disclosure

The lender must provide this to you at least three business days before you close your loan. This document contains the final terms of your loan. Use this time frame to review it thoroughly and compare it to your loan estimate. Don’t be afraid to ask questions if you are unclear about the terms.

Make Your Offer

You may want to keep several factors in mind as you and your real estate agent get ready to present an offer to the seller. Feel free to ask you agent any of these questions:

The asking price of the home
Recent home sales in the area
Market conditions
Prospective re-sale value
Satisfaction with the neighborhood and amenities
Condition of the home
How many other prospective buyers are looking at this home
If there is a back-up home in mind if this doesn’t work out

After the offer is accepted

Before closing, clarify when the seller will be vacating the home. If they remain on the property after the closing date, you are entitled to negotiate rent payments.

Get A Home Appraisal

Inspections are important to help you fully understand the condition of a home. They can also be helpful for negotiations to help drive prices down or have additional services stipulated in the contract.

Take the time to get commitments in writing.

Set Closing Date, Time and Location

Bring along any co-applicants and your realtor, if you would feel more comfortable having them present. Closing usually takes place in the presence of a public notary. You should be prepared for several things:

Review the final documents. Make sure the rates and amounts are what you have agreed to.
Be prepared to pay closing costs and wire money. Personal checks are usually not accepted.
Sign the loan and be prepared to show photo ID and possibly a Social Security card.