Qualifying for a loan isn’t a guarantee that your loan eventually will be funded-underwriting guidelines can shift, lender risk analysis can change, and investor markets can alter. Clients may sign loan and escrow documents, then be notified 24 to 48 hours before the closing that the lender has frozen funding on their loan program. Having a second lender that has already qualified you for a mortgage gives you an alternate way to keep the process on, or close to, schedule.
Make an offer
Your real estate agent will help you decide how much money you want to offer for the house, along with any conditions you want to ask for. Your agent will then present the offer to the seller’s agent; the seller will either accept your offer or issue a counteroffer. You can then accept, or continue to go back and forth until you either reach a deal or decide to call it quits.
Before submitting your offer, take another look at your budget. This time, factor in estimated closing costs (which can total anywhere from 2% to 5% of the purchase price), commuting costs, and any immediate repairs and mandatory appliances that you may need before you can move in. Think ahead-it’s easy to be ambushed by higher or unexpected utilities and other costs if you are moving from a rental to a larger home. For example, you might request energy bills from the past 12 months to get an idea of average monthly costs.
When you review your budget, don’t overlook hidden costs, such as the home inspection, home insurance, property taxes, and homeowners association fees.
If you reach an agreement, you’ll make a good-faith deposit, and the process then transitions into escrow. Escrow is a short period of time (often about 30 days) during which https://rapidloan.net/payday-loans-wy/ the seller takes the house off the market with the contractual expectation that you will buy it-provided you don’t find any serious problems with it when you inspect it.
Have the home inspected
Even if the home that you plan to purchase appears to be flawless, there’s no substitute for having a trained professional do a home inspection of the property for the quality, safety, and overall condition of your potential new home. You don’t want to get stuck with a money pit or with the headache of performing a lot of unexpected repairs. If the home inspection reveals serious defects that the seller did not disclose, then you’ll generally be able to rescind your offer and get your deposit back. Alternatively, you can negotiate to have the seller make the repairs or discount the selling price.
Close-or move on
If you’re able to work out a deal with the seller-or better yet, if the inspection didn’t reveal any significant problems-then you should be ready to close. Closing basically involves signing a ton of paperwork in a very short time period, while praying that nothing falls through at the last minute.
Things that you’ll be dealing with and paying for in the final stages of your purchase may include having the home appraised (mortgage companies require this to protect their interest in the house), doing a title search to make sure that no one other than the seller has a claim to the property, obtaining private mortgage insurance or a piggyback loan if your down payment is less than 20%, and completing mortgage paperwork. Other closing costs can include loan origination fees, title insurance, surveys, taxes, and credit report charges.
Congratulations, New Homeowner! Now What?
You’ve signed the papers and paid the movers, and the new place is starting to feel like home. Game over, right? Not quite. Homeownership costs extend beyond down payments and monthly mortgage payments. Let’s now go over some final tips to make life as a new homeowner more fun and secure.
