So you have decided you want to buy a house, now what????
One of the first steps in buying a home is getting a mortgage approval. It's important to know what type of mortgage you are approved for and how much it is. You need to know what you payment will be and how much money you will need at closing. Certain mortgages may have requirements that may affect what kind of home you can buy – like a duplex, a condo or possible FHA appraisal concerns. Your real estate agent will want your preapproval so that they can present it with your purchase agreement.
To get your mortgage approval, you will need to contact your loan officer and they will pull your credit report and calculate your income and debt ratios to see how much of a home you can buy. You will want to make sure you are comfortable with the payment and that you will have the money you need for the down payment.
Once you have your mortgage approval, your real estate agent will help you search for your new home. After you find a home, your agent will write the purchase agreement with you. Once it's accepted, you continue the mortgage process. You will want to have an inspection done – that's different from an appraisal. An inspector will go over the home and give you a report, most of them will also go through the house with you. An inspection looks at the condition of the house, an appraisal is done to determine the value of the home. Your lender will order an appraisal and also the title work for the property.
Your loan officer and processor will go over your file and make sure all the documentation is received. Once the appraisal, income and asset information are all received, your file will go to the underwriter for final approval. Your loan officer will go over the terms of your mortgage and also tell you how much money you will need at closing.
You will need to contact your insurance agent to get a homeowners insurance policy. You want to start that process once you have your inspection complete and know that the appraisal is done. Sometimes your insurance agent will want a copy of the appraisal, your loan officer can get that to them. They also need some other information from your loan officer – loss payee clauses and if you are escrowing. Once the insurance agent has the binder completed, they will send a copy to your loan officer.
The closing takes place at the title company or a lawyers office in Minnesota. At that time, the closer goes over all the forms with you, you sign several forms including the mortgage and note. The closer goes over the settlement statement with you and makes sure you understand everything. Once all the paperwork is signed, you are now a homeowner!!! You get your keys and you can move in!
