The first step in the home buying process is to determine how much home you can afford. While you may have your own idea of what you are willing to pay, it may or may not line up with current mortgage guidelines that limit income to debt ratios.
Get Pre-Approved and gain an edge!
With a Pre-Approval from Guaranteed Financial, you’ll have extra power in the home marketplace. You’ll know what you can afford, be treated as a serious buyer and it often strengthens your hand in negotiations. Sellers and their real estate agents know you have the means to buy, therefore it elevates your position.
The Guaranteed Financial pre-approval process is fast and easy, and there’s no obligation. Look to your right for the Apply Now button to contact a mortgage loan consultant and to start your journey to home ownership.
Choose the mortgage that’s right for you. We offer a wide range of loan programs, making it easy to choose a loan that matches your needs. We can explain your options via a variety of loan programs including loans for borrowers who just miss government agency guidelines. We even offer a range of specialty loans for real estate investors and foreign nationals. In short, Guaranteed Financial is all about flexible lending options and expert advice to help you choose your mortgage solution.
2. Finding Your New Dream Home
Now the fun part begins. Start by making a list of the top five things that are most important to you about your home. Consider all aspects of your day-to-day life. For example, your list may include location to your work, price and a monthly mortgage payment, number of bedrooms, neighborhood amenities like schools or parks and size of the yard.
Next, choose a Realtor to help with your home search. Your Realtor will be an excellent source of knowledge on all aspects of the purchasing process. Let the Realtor take the lead in building a property base that fits your requirements. And remember, the key to a good relationship with your Realtor is communication. Be specific and let your Realtor know what you expect before, during and after the transaction.
Because you are pre-approved and have selected the best mortgage, you are simply a more qualified and more knowledgeable house hunter. You know your price range and you know what you can afford-and so does your real estate agent, who can facilitate home viewing based on your criteria.
This process can take as short as a couple of weeks to as long as a few months, it is entirely up to you. Be sure to compare properties, to look at properties slightly above your target price (remember there is a negotiating process when buying a home) and keep records of what you have already seen and what you liked and didn’t like about the properties.
While the real estate market does have a seasonal cycle to it (more properties go on sale in April, May, and June then do in Nov, Dec, and Jan) you can find advantages to buying at any time throughout the year. For example, in the winter you will tend to have more negotiating power as a buyer but will have fewer properties to choose from. The opposite is true in the spring. You will have less negotiating power as a buyer but will have the greatest number of properties to choose from. Whatever is more important to you is all that matters.
Once you’ve found that perfect home, the process typically goes like this:
- Your real estate agent helps you submit a formal offer and purchase agreement
- Negotiations begin, often with a round of offers and counter-offers.
- You and the seller settle on the price and you deliver an earnest money deposit with the sellers’ attorney as a good faith gesture that you truly intend to purchase the property.
- You usually have five days from this point to have your home-to-be inspected by a professional inspector who can identify any problems that need attention. He or she will look at everything from structural issues to maintenance issues to appliances included in the sale. If any problems are found, you and the seller can negotiate fixes (either in repairs or perhaps reduced sale price) before the day of closing.
- You also usually have five days from this point for an attorney to review the contract before it becomes binding. The purpose of this to ensure there are no out of the ordinary clauses and if there are that you agree to and understand them.
By now you’ve had a professional home inspection and have had an attorney review the contract for you. Everything looks ok and you want to continue with the contract and the purchase. At this point, it is time to meet or get in contact with your mortgage loan originator for the second time. This time you will take your updated documents (depending on the time between the initial pre-approval meeting and now) as well as any pertinent information about the property.
Click Here for a list of documents you will need
Next, you will sign an application and will be given a GFE (or Good Faith Estimate) that will estimate your total investment to purchase the property. This estimate includes your closing costs, down payment, homeowner’s insurance policy, etc. Your Mortgage Loan Consultant will answer any questions you may have and once he/she packages your application, he/she will send the loan to be processed and underwritten.
At this stage, we will begin processing your loan and have an appraisal done. An appraisal is necessary and ensures that the home’s value is worth the sales price. In the case of FHA loans, the appraisal also serves as an inspection of the home. FHA requires that the home meet minimum standards and the appraisal will ensure that. During this time we also verify your employment, income, debts on credit as well as a few other things. We also collect information from the sellers’ side – mainly title, survey, and any pertinent village documents as well as manage and coordinate the entire process. Once we clear all of the conditions put forth on the loan we issue what’s called a “CTC” (or Clear to Close). This indicates to all parties that your loan process has been completed and that you are now fully approved and ready to close on the home. At this point, your realtor will take you on a final walk-through of the property and the attorneys’ will schedule the closing. Your Mortgage Loan Originator will contact you to go over all of the final numbers before the closing.
5. Closing/ Funding of Loan
Once the closing has been scheduled, we order the documents that you will sign at closing. Your attorney will advise you as to where the closing will take place and where. The closing is usually either in the morning or early afternoon and will be during a weekday. You will be asked to bring a cashier’s check in the name of the Title Company (Closing Agent) that will be for the total dollar amount you will need to close your loan. Your attorney will more than likely ask you to overestimate the check by a little in the event there are any slight changes to any numbers at closing (there are usually none and this practice is antiquated but attorneys still seem to feel more comfortable doing this as the Title Companies will only accept certified funds). Any overage is given right back to you at the closing. Next, you sign your mortgage papers. After a final review and approval of all documents, we disperse funds to the seller, (the entire process usually takes about an hour or so). The only item left is to extend congratulations to you on officially becoming a homeowner.