Home Buying Guide - from first time home buyers to second home owners
BUYING A HOME |
SELLING A HOME |
CHARLESTON MLS | CHARLESTON
Home Buying Process
We're Here for You!
We're thrilled you've decided to buy a home, and we're here to help you along the way!
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For most people, a new move is a very rewarding and invigorating experience. It can also be a little nerve wracking - especially when it comes to getting a new mortgage. That's why we work hard to make sure our customers are comfortable throughout the entire mortgage process.
Road Map to your mortgage:
- Get Pre-Approved
- You'll know how much house you can afford so that you don't waste precious time looking at properties that are not within your price range.
- Being pre-approved gives you the negotiating power you may need, plus it lets the seller know your financing is certain and you are serious about purchasing a home.
- Get Organized
- You will need to provide numerous important documents to help verify your expenses and income. This allows us to give you the most accurate assessment of how much you can c1fford to borrow .
- Most recent two year's W-2s
- Paystubs for last 30 days
- Last 2 months of any stock, mutual fund, or I RA/401k accounts
- Copy of you divorce decree (if applicable)
- Last 2 months of bank statements (all banks and all pages)
- Apply for your loan
- Employment and Income Information
- Most recent two year's W-2s
- Paystubs for last 30 clays, showing YTD earnings
- Most recent tax return
- If self-employee!: tax returns for past two years
- For VA applicants: DD214 and Certificate
- Last 2 months of all bank, stock, mutual fund, and/or IRA/401k statements (all pages)
- Property Information
- Residence history for past two years
- Contract of sale on present home
- Current real estate purchase contract
- Divorce or bankruptcy papers
- Alimony payment info
- Child support info
- Additional Information
- Drivers License
- Check for application fee
- Once you have completed your loan application, we will begin the loan process, which includes researching the following ...
- Credit History
- Employment history
- Assets, including your bank accounts, stocks, mutual funds, and retirement accounts
- Property value of the home you are buying
- You can expedite the loan process by following a few guidelines:
- Promptly respond to requests for additional documentation. This is especially important if your rate is already locked or if you plan to close by a specific date
- Do not make any major purchases, such as a car, furniture, or another house until your loan is closed. Large purchases that increase your debt may have an adverse effect on your loan.
- Do not move money into your bank accounts unless it can be documented. If you receive money from a family member or friend, please inform your loan consultant before depositing.
- At least 3 days before you close on your home, you will receive a Closing Disclosure.
- This is a 5 page document that will help you understand all the costs of your loan. Once you receive this, it is critical that you confirm receipt immediately.
- Closing Your Loan
- Be prepared to:
- Bring a cashier's check for your clown payment and closing costs (if applicable)
- Review your final loan documents to verify the interest rate and loan terms are what you agreed to. Confirm the name and address that appear on tl1e loan documents.
- Sign all loan documents.
What you need to know:
- What is a pre-qualification?
- A pre-qualification is a free process of determining how much money a potential homebuyer will be qualifiecl to borrow before applying for the loan.
After a quick analyzation of your income, assets, and credit, your Loan O ficer will be able to tell you how much loan amount you are most likely to qualify for and what the best loan program for you will be.
- What loan is best for me?
- Your loan officer will build the best loan program for your situation, and may ask these questions when helping you choose a loan:
- How long do you plan on residing in the home?
- Do you expect to have a significant increase in income in the near future?
- Is a stable monthly payment or a low initial interest rate more important?
- How much do you l1ave for a down payment?
- Are you self-employed or on commission?
- What are closing costs?
- Closing costs are fees that both the buyer and the seller must pay for services performed to process and close the loan. In addition to the purcl1ase cost, some closing costs may include:
- Appraisal Fees
- Title and Recording Fees
- Pre-Paid Interest
- Loan Discount Points
- Title Insurance
- What is pre-approval
- Once you know your maximum loan amount and begin your home search it's time to get pre-approved! A pre-approval is a free in-depth assessment whicl1 gives you a conditional approval from the lender for a specific loan amount prior to purchasing a home. It also shows the seller and realtor that you are serious about purchasing a home and gives you an advantage if someone else is interested in the same property.
- Can I qualify for a loan if I have recently changed jobs?
- Yes! When you apply for a loan, you are evaluated on your employment history and stability of income.
- What is in a mortgage payment?
- Typically: principal, interest, property taxes, mortgage insurance, and home insurance.
- What is hazard insurance?
- Hazard insurance is a contract that protects you from any financial losses on your property that might result because of fire, wind, or other hazards. In some cases, you will have to purchase additional flood insurnnce if you live in a flood risk area as determined by FEMA.
- Tip: Make sure you get an insurance quote and declaration page early in tl1e purchase process to avoid closing delays.
- Fixed rate vs. adjustable rate:
- The interest and payment in a fixed rate loan remains constant over the life of the loan. Interest and monthly payments in an adjustable rate loan may increase or decrease over time.
- When should I refinance?
- If interest rates have substantially decreased, to eliminate mortgage insurance, or to increase casl1 flow, AND you plan on staying in your home long enough so that the savings surpasses the refinance cost.
- What is PMI
PMI stands for Private Mortgage Insurance. PMI is additional insurance for homebuyers who have less
than a 20% down payment. This protects the bank against loss if a borrower defaults on the loan.
TRID the new mortgage process: Once you find a house and are under contract, the following steps should be taken: