HOME BUYING PROCESS
Hire a Real Estate Agent - Interview with a real estate professional. You will need to sign a buyer brokerage agreement to hire them. The agreement protects you, the buyer’s agents interests and outlines the duties of each party. The buyer’s agent fee is paid by the seller.
Review Loan Programs - Learn about different loan programs.
FHA loans require 3.5% down payment with an upfront and monthly private mortgage insurance payment for the life of the loan.
Conventional loans require 20% down payment to eliminate PMI. There are programs to pay for the PMI upfront to added into the mortgage.
USDA loans require no down payment, property must be in a rural area based on the USDA website, upfront and monthly private mortgage insurance is required.
VA loans do not require a down payment and no private mortgage insurance (must be an eligible Veteran to qualify for this type of loan) They have a funding fee if the Veterans is not at least 10% disabled.
Obtain Financing Pre-Approval
Submitted the documents to your loan officer and lender of choice from the documents below:
- Your social security number and your current address
- Your residential address for the past two years
- Landlord names and addresses for the last two years, if you rented during that time
- Paycheck stubs from the last 30 days showing your year-to-date earnings
- W-2 tax forms (issued by your employer) for the past two years
- If self-employed or if rental income is being used to qualify, supply last 2 years of Federal tax returns with all pages, schedules, and attachments.
- If using income from other sources (i.e. Social Security, Pension, Alimony or Child Support) provide a copy of evidence of continuation, such as an awards letter or divorce decree.
- Bank account statements from the two most recent months for all checking & savings accounts
- Other asset statements from the past two months for any CDs, IRAs, stocks, bonds or other securities you intend to use for your down payment
- Current real estate holdings, including property address, current market value, mortgage lender's name and address, loan account number, balance and monthly payment
- A list of any new monthly debts not listed on your credit report (auto loans, student loans, mortgage loans, credit cards, etc.), including creditor name, address, account number, minimum monthly payment amount and outstanding balance on each account
Select & View Properties
- Create a home search with your criteria ie., your area of choice, # of bedrooms, # of bathrooms, type of home, etc on www.reshawnaleaven.com
- Schedule a showing appointment - http://calendly.com/realtorleaven with your top homes of choice by the MLS numbers (MLS# starts with two alphabets - PG, CH, FX, AR etc)
- Review each property - based on condition, area and needs
- Select a home of choice
Write an Offer to Purchase
It’s important to understand the costs of buying a home. Let’s take a look at the funds needed to buy a home. You will need money to buy a home even with a down payment assistance program.
Funds Needed Before Placing an Offer on a Home
- Earnest Money Deposit - 1% of the sales price
- Home Inspection - $300 - $450
- Appraisal Fee - $400 - 600
When you find the home, I will prepare a market analysis of the property before making an offer. The reason is to avoid paying too much for a home and avoid appraisal issues during the underwriting phase.
Your offer will need:
❏ Updated Loan Pre-Approval Letter
❏ Offer Price
❏ Earnest Money Deposit
❏ Conveyances - “What stays inside and outside the home?”
❏ Closing Costs
❏ Negotiate & Contract Acceptance
After the offer is submitted the seller will:
❏ Accept the offer as written
❏ Counter the offer with different terms and conditions
❏ Reject the offer with no new terms and conditions. Typically, low offers get a rejection.
❏ Remove Contingencies
Many offers have conditions that have to be completed in order to move on to the next step in the process. Typically, home inspections are the first items to complete as you don’t want to invest in a money pit.
❏ Home Inspection
❏ Radon Inspection
❏ Lead Based Paint Inspection
❏ Termite Inspection
❏ Homeowners and/or Condo Association Resale Package
❏ Lender Underwriting
The underwriter will review all the documents and check the credit for any new credit created. Do not apply for any new credit.
❏ Homeowners Insurance
You want to make sure that you have the right coverage and the monthly payment amount as the lender may have quoted a different amount in your initial estimate.
You want to ensure where your property line begins and ends, view any encroachments or other easements with the home. The fee is typically $300 to $500 depends on how large the lot size is. Surveys are only needed with single family and townhomes/condo with land space dedicated to the owner of record.
❏ Conduct Title Search
The title company has an abstractor who researches the land records for liens and other potential issues at the land records office where the property is located and gives a report to the lender with their title commitment. A title commitment is a document that explains the amount of coverage the title company is going to ensure for the title insurance. If there are any issues, the lender may have to delay or deny the loan.
❏ Review the Final Closing Disclosure
The Final CD will illustrate the total closing costs, credits, loan amount, interest rate and other fees associated with your loan. The final number to bring to closing is the amount that your certified funds needs to be for closing.
❏ Obtain Funds for Closing
Go to your bank and get certified funds made payable to the closing company based on the Final Closing Disclosure from the lender.
❏ Close on Your New Home
- Bring your driver’s license
- Your certified check for your amount needed to close
- Any additional documentation that you lender may be requesting
❏ You are NOW a Homeowner!