The Home Buying Process - Part 1

noreply@blogger.com (Unknown) — Thu, 16 May 2013 22:56:00 +0000

I am often asked questions like, “How long will it take me to get approved for a loan?” or “What does the time-line look like, from meeting my agent, applying for a loan, making an offer and closing on the home?”

Questions regarding the process and time-line for buying a home are very common, especially for first time home buyers, or for those who haven’t bought a home in a few years.

The purpose of this blog post is to give a step by step overview of the process, including both the lending timeline and the real estate purchasing process. I hope to explain them concurrently so that those interested can see how the loan application, appraisal, home search, offer, title etc all fit together.

This topic will be covered in three parts, or three blog posts.

Part One – Meeting your agent and loan officer

Sometimes my clients come to me after they have already met with a loan officer. Sometimes it was their loan officer who referred them to me (thanks!). Most often, however I meet with a prospective buyer, and during that conversation I ask them “have you met with a loan officer, and have you been pre-approved”.

The answer is typically “no, we haven’t. How does that process work, what do we need, and do you know a good loan officer?”

So, let’s talk about the “pre-approval” process.

Getting pre-approved means that your loan officer is going to speak with you about your financial needs and goals and discuss with you how they fit with and relate to your home buying goals. Your loan officer will also review with you your current financial situation and will then discuss with you what type of loan you might be able to qualify for and in what amount. Your loan officer should explain to you the pros and cons of different loans (FHA vs Conventional for example) as well as different options for structuring the loan (such as points, credit for interest rate chosen and so on).

During this phase, the loan officer is attempting to determine your financial eligibility based on information you have verbally provided. He or she will ask questions about your overall debt, your monthly payments, your savings and assets and your credit history. You may be asked questions like “Where will your down payment come from?” or “What type of monthly payment can you afford?”

Once your loan officer has enough information they will run a cursory application (this is a computer generated process) and you will be given a “quote” for the interest rate that you would likely qualify for. The loan officer may or may not decide to run your credit at this point. That will probably depend on what documentation you have brought with you, we will get into that in a minute.

Once this initial, cursory consultation is completed, you should have a general understanding of your interest rate options, cost of the loan and loan type that may best fit your needs. If you decide to move forward, then it’s time to dig into the details.

Your loan officer has to verify every piece of information being used in your loan. That means that if you told him you make x amount a year, have x amount in savings and have x credit score, he needs to prove it on paper. Some of these items may be requested BEFORE your loan officer runs your credit and application for pre-approval. Below is a list of commonly requested documentation that your loan officer may ask for;

Most recent 30 days of pay stubs
Two (2) years W2's (From All Employers)
1099’s if self employed or contracted etc
Pension award letter (if applicable)
Social Security award letter (if applicable)
Two (2) years personal tax returns (including all pages and schedules)
Most recent bank statements (NOT ACCOUNT SUMMARY OR TRANSACTIONS HISTORY) on all bank accounts (ALL PAGES of each month's statements, even if the page is blank)
Most recent IRA/401k/ Mutual Fund/ Brokerage Account statements (ALL PAGES of each month's statements, even if the page is blank)
Copy of current mortgage statements for all the homes that you own
If your real estate taxes, home owners insurance and/or home owners association (HOA) dues are not part of your mortgage payments, then we will need a copy of the last real estate tax bill, homeowners insurance bill and most recent HOA statement.
Copy of your Driver's License
Copy of your Social Security Card
Copy of your earnest money check AND a bank printout showing when the check is cashed by the title company and clears your bank account
Divorce Decree (if Applicable)
Certificate of Eligibility (VA Loans only)
DD214 Member 4 copy (VA Loans only)

Once your loan officer runs your credit and application, you will either be pre-approved or declined.

If you are declined, your loan officer should be able to tell you why. Don’t worry; this is a great way to determine your financial strengths and weaknesses. Don’t give up, work with your loan officer and real estate agent to determine a plan to get approved and buy a house! If you have the assets but not the credit, you should seek out an agent with the knowledge and skills to help you buy a home using “creative financing”. Yes, we can help you with that!

Once you are pre-approved or (pre-qualified, depending on the terms your loan officer and their bank/mortgage brokerage use) you can present your pre-approval or pre-qualification letter to your agent. This tells your agent that you are LIKELY to be approved for the loan. This way, your agent knows that the time spent researching neighborhoods, valuating property, scheduling appointments and showing you properties is time well spent. While most agents would love to be able to show homes to everyone interested, there just isn’t enough time in the day. In order to feel confident in putting that much time and effort into you, we need to know that you are both serious, and able to purchase a home. Getting pre-approved does just that.

At this point, your loan officer will submit the loan to underwriting, with all the documentation included, and your agent will be actively searching for and showing you homes that meet your criteria.

So what happens now?

NOTE: Just a quick work on choosing a loan officer. If you already have an agent, ask your agent for a recommendation. Most agents have a couple of loan officers they work with. Why do this? Your agent has likely gone through this process many times already with the loan officer(s) that they use. This means they already have a good working relationship and established strong lines of communication. How well your loan officer and real estate agent work together is a key element in getting you into a home and closing on time. Your agent can also vouch for the loan officers technical knowledge of lending (there is A LOT for a loan officer to know) but also for their customer service, timeliness, communication, follow-up etc. If you are searching for a loan officer on your own, then interview more than one. You need to feel comfortable with your loan officer. It is essential that they communicate with you and keep you in the loop.

Mesa Arizona Basement Home In Salerno Ranch For Sale

noreply@blogger.com (Anonymous) — Sun, 05 May 2013 20:52:00 +0000

If you're looking for plenty of room to entertain or more room to raise a growing family, this is your ticket! Come walk through this rare find, a home with a full basement in the Mesa Arizona community of Salerno Ranch.

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Some of the amenities this home includes are:

Entry/Living Room

- Full finished basement

- Split Master floor plan

- Large Master Suite

- Fireplace upstairs

- 10' Ceilings upstairs

- 9' Ceilings basement

Basement

- Upgraded wood/tile floors

- Granite tile counters in kitchen

- 48" upper cabinets in kitchen

- Double ovens in kitchen

- Game room/media area (basement)

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- Kitchen area in basement

Media Room

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- Over sized 1/4 acre lot

- RV Gate

- 3 car garage

This is a beautiful and spacious home. If it's in your price range, jump on it right now; it is only $444,900 (6/6/13).

Thank you for taking the time to read this post. We hope to have the opportunity to help with any of your future real estate needs!

Robin Lamb

AZ Real Estate Pros/JR Lamb Team

RCP Real Estate

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