7 Steps To Buying Your First House

Are you ready to buy your first home? Right now, you’re probably feeling a mixture of excitement and nerves. That’s completely normal. The home buying process can be long and complicated, especially for for first-time homebuyers like yourself who are about to take their first step into the unknown. If you’re prepared and have a good idea of what to expect, the process goes a lot smoother – and feels less daunting. To help you feel more confident as you embark on the home buying journey, Summit Mortgage simplified the process for you into seven steps.

1. Find A Loan Officer

A loan officer is someone who can help guide you through the home buying process. They’re experts in home loans and know the process better than anyone since it’s what they do day in and day out. In this early phases of the process, your loan officer will talk you through your credit report, income, and asset documents. They’ll be a valuable resource to you and can answer any initial questions you have regarding what the different types of loans are and how they work.

They’ll take time to get to know your goals for the home purchase and begin giving recommendations for the loan program that best suits your needs. This is to make sure you’re set up for pre-approval. If you aren’t sure how to choose, have more questions, or want help getting started, simply complete our Quick Start Form and we’ll connect you with a loan officer that matches your specific needs. They’ll reach out to you and provide a free consultation and guide you through every step of the loan application process.

2. Gather Documents

The easiest way to get the home buying process started is to gather all your important documents. This includes your current driver’s license or other unexpired government-issued photo ID, residence history for the past two years, employment history for the past two years, proof of all current income sources and bank account statements for the preceding 60 days. Gathering everything now will help you avoid delays later on; this also strengthens your pre-approval. With this information, your loan officer can help calculate your debt-to-income ratio and buying power. In fact, you can request a rate quote from Summit Mortgage online to get a closer look at what you can afford.

Finally, you can read up on mortgage terms and types of loans in the Summit Mortgage Homebuyer Guide to establish a strong foundation of knowledge to lean on going forward. Your loan officer is the best resource to use when you have questions.

3. Get Pre-Approved For A Loan

Even before you start browsing the real estate listings, it’s strongly recommended to get pre-approved for a mortgage loan. While a pre-approval isn’t required for a realtor to show a home, many agents have implemented policies that they will not show a home without first seeing a pre-approval letter. So why else do you need to get a pre-approval? First, pre-approvals helps you get a better sense of how much you can afford. The lender reviews your financial information, such as your income, credit report and score, in order to determine what type and loan amount you might qualify for. Having this information makes it easy to figure out your price range and to start looking around for your potential first home.

Second, having a fully reviewed pre-approval can give you an advantage over other buyers. The real estate market is competitive and there will be other people out there putting offers on the same homes you are, you need to be prepared to make a decision quickly and know that your pre-approval was fully reviewed (including all documents) instead of just someone printing out a generic approval form for you based on what you told them. Summit also offers a propriety pre-approval – called Seller’s Choice Underwriting Guarantee* – that comes with an underwriting guarantee and a letter of assurance to the seller to be submitted with your offer that makes your offer stand out above others.

Lastly, getting pre-approved now can help save you time. Knowing how much you can spend eliminates a lot of confusion and back and forth as you search for houses. You can use a mortgage payment calculator for a detailed prediction. Then, when you do find the perfect home and your offer is accepted, the final stages of the loan application process will move along much faster since you have already provided a good chunk of the required documents – and you won’t be digging through moving boxes to find things!

*This program enables you to make an offer to sellers with confidence and them to feel assured accepting your offer, since if your loan doesn’t close according to the terms of the Guarantee Letter, Summit will purchase the home in cash or pay the seller $10,000 of our own funds. This program is only available for eligible mortgages, be sure to ask your loan officer for more information.

4. Get A Real Estate Agent To Help You Find A Home

Now that you have your finances queued up and ready to go, it’s time to start looking for a house. A real estate agent will help make this phase of the process simple and easy to understand. Recent statistics indicate that there are currently an estimated 2 million licensed real estate agents across the United States; for this reason it is important that you take time to choose the agent who is right for you. Once you have chosen an agent you feel understands your needs you will provide them your pre-approval which will tell them your price range, and let them know your preferred neighborhood and anything else you might be looking for, the agent will be able to use their resources to locate homes that perfect match your needs. Take your time and don’t rush. Buying a home is a huge investment and you want to make sure it’s exactly right for you.

When you’re ready to put in an offer, your real estate agent will help you negotiate and reach an agreement. When your offer is accepted, you’ll likely get a home inspection done to check the soundness of the home structurally and then begin finalizing your loan terms with your loan officer.

5. Finalize Your Loan Terms

Once you have an accepted offer, you will work closely with your loan officer and processor to finalize your loan terms. During this time you will complete a number of steps to include: working with your realtor to get a home inspection, sending the purchase agreement to your loan officer, finalizing the terms of your loan (including locking in your interest rate), sign the initial disclosures, work with you loan officer or processor to pay for your appraisal fee, provide any updated paperwork needed to process your loan and explore homeowner’s insurance options. Your lender will order title work, a flood certificate and the appraisal.

When choosing homeowner’s insurance, it’s important to choose an adequate level and correct type of coverage to protect your investment in your new home. Townhomes or condos often have a master insurance policy covers common areas and a portion of the home, often these requires the homeowner to have an H06 policy instead of a standard policy. Every policy and provider is slightly different so it’s important to take time to make sure you are getting the policy that meets what the lender requires as well as what you need.

6. Sign Your Closing Disclosures (CD)

Now you’re in the home stretch. After your file is submitted to underwriting with contract, you may be asked to submit additional information. Once you have a loan approval with property address, have locked in your interest rate and your appraisal is in you’ll receive a closing disclosure (CD) with your loan terms, the amount of fees due and your projected monthly payments as well as estimated cash to close. A CD will be delivered to you at least three days before closing, and a reputable lender will have the numbers balanced with the title company to ensure you can rely on the information. Most title companies require your funds to be brought to closing in the form of a certified check (cashier’s check) or wire transfer. Be sure to bring your checkbook to the closing in case there are any minor changes.

Upon receipt of the CD, ensure you review it in a timely manner in order to ensure you aren’t holding up the closing. By law the CD must be signed three business days prior to closing.  Should any questions arise or if you feel confused at any point, contact your loan officer or processor for help right away.

7. Get The Keys To Your Very First Home On Closing Day

Congratulations, you made it to closing day! In most cases closing will take anywhere from 30-90 minutes, depending on the type of loan you are getting and the amount of questions that you may have. Please remember, the only bad question is the one you don’t ask – it will keep you up at night! As soon as you finish signing all the remaining documents and submit your funds, you will get the keys to your home and you’ll be able to officially call yourself a homeowner and start moving into your brand-new house.

The Journey to Ownership Starts Now

Now you know where to start when buying a home. Hopefully, this article gives you a better idea of how the home buying process works so that you can move forward with complete confidence. While it may seem intimidating at first, remember that professionals like your loan officer and real estate agent will be there to guide you along the way. If you’re ready to meet a loan officer and jump-start the process, find one on the Summit Mortgage site today. Any questions about working with loan officers or Summit Mortgage in general? Feel free to get in touch.