The Home-Buying Process
After 14 years in the mortgage business, I know one thing for sure...buying a home can be a stressful time! Here I will try to help explain the process to make it as smooth and uncomplicated as possible.
- First, you need to complete a loan application, unless of course you are buying the home for cash. **It is VERY important to get pre-approved before signing a contract to buy a home, so that you know how much you can afford, what your payment will be, and how much closing costs are.
- Next, find a qualified Realtor to help you find a home, make an offer, and complete a sales contract to purchase it. Your Realtor can help you decide how much to offer, whether or not to ask for the seller to pay your closing costs, etc. You will also need to provide your Realtor with a Pre-Approval letter.
- Once you have an accepted offer and the contract is executed, it is time to gather all of the items on the Document Checklist (below). I can promise you that home buyers who get ALL of these items to their lender quickly will have a much smoother loan process. It allows the lender more time to review your documents to ensure they don't have any questions and there are not any errors.
- After you have provided your documentation and signed all of the application and disclosure documents, the lender will order a property appraisal from a licensed appraiser; title search and policy commitment from a local title company; income/asset verification, etc. The file will be processed and sent to underwriting for approval. During this time your lender may request additional 'approval conditions' for the underwriter. This is NORMAL, and is part of approving your loan.
- Once the file is 'clear-to-close' your lender will coordinate with the Realtors and title company to set a time for closing where you will sign all of the final loan/title/real estate documents to complete the home purchase. CONGRATULATIONS YOU ARE A HOMEOWNER!
This is a list of documents that are most-often required at the time of your loan application. The sooner these items are gathered and given to your lender, the sooner they can move your file into processing, underwriting, and ultimately closing!
- Pay stubs (or monthly source of income) - most recent 30 days
- Personal tax returns (all pages and all schedules) - last 2 filing years
- Business tax returns (all pages and all schedules) - last 2 filing years - if applicable for self-employed
- W-2's - last 2 years
- 1099's - last 2 years - if applicable for self-employed
- Bank statements (all pages) - most recent 2 months
- Retirement or 401k statements (all pages) - most recent quarterly statement
- Other asset statements (all pages)- most recent 2 months or quarterly statement, whichever is applicable
- Driver's License (or other state issued ID) & Social Security card
- Fully executed sales contact - on home being purchased
- Information on any current owned (or recently sold) real estate
- Contact information for homeowner's insurance provider and a quote for annual premium
Still have questions..?
For more information, and to get other answers about buying or refinancing a home: