New Home Purchase

Buying a home is a very exciting time. Whether you are buying your first home or are a veteran to the process, it can be a little confusing and may seem like a lot of work. At Mortgage and Investment Consultants, we will keep the process simple for you. We will walk you through every step of the way and ensure things run smoothly. This is a simple outline of the process so you know what to expect.

1. Prequalification
The loan approval process begins with an initial interview with your loan officer to discuss the potential loan. This will help you to determine in advance what price range you can realistically afford and the mortgage amount for which you can qualify, and also give you more purchasing power when it comes time to make an offer on a house.

For your first meeting with your loan officer, you should be prepared with the following information for all applicants:

• Name, age, and social security numbers
• Current address. (If you have been at your current address for less than 2 years, will need a four year history.)
• Employment & pay history
• Your bank account numbers and addresses
• Details on any properties currently owned
• Current rent or mortgage amounts

After filling out a loan application with your loan officer including the above information, and giving permission to check your credit report, your loan officer can then start the process to get you prequalified.

Depending on your credit history and your current financial situation, the loan officer will work with a lender to determine how much and what type of program you qualify for. Your loan officer will then provide you with a prequalification letter that you can use when making an offer on a home.

2. Find a Home
Working with a Realtor
It is a good idea to work with a realtor when purchasing a home, especially if you are first time homebuyer. There are typically two agents involved in the process the selling realtor and the buyers realtor. The selling agent works with the sellers, and are acting in the best interest of the seller. Your realtor, or the buyer's agent, will be working for you. They will help you find a home, determine fair market value, and walk you through the whole process.

Making an Offer
When you have found a home the fits your needs, your realtor will help you determine an offer that makes sense, and will draw up a Purchase Agreement to make a formal offer. You will typically have to make an Earnest Money Deposit at this time to show your good faith in following through on your offer to purchase the home. If your offer is not accepted, your earnest money will be returned. If the offer is accepted, your deposit will be applied towards your closings costs. There may be negotiations at this time with the sellers to come to an agreeable purchase price.

Offer Accepted
Once an offer to purchase the home is accepted, all parties involved will sign the purchase agreement and determine a time frame for closing the deal. Your realtor will then provide a copy of the purchase agreement to your loan officer and work with her to begin the loan process.

3. Loan Process
Once you get an offer accepted, your loan officer will need to collect the following documentation to present to the lender to underwrite your loan.

• The signed Purchase Agreement (provided by realtor)
• Signed loan application and other disclosures (provided by loan officer)
• Pay stubs covering the last four weeks
• W2's for the last two years
• Bank statements for the last 2 months
• If you are self employed or earn commissions, tax returns for the last two years
• Divorce settlement papers, if applicable
• Landlord information
• Homeowners insurance information
• You will potentially need other items, for example copies of cancelled checks for rent paid. Your loan officer will inform you of additional information needed.

4. Underwriting and Final Approval
Once all of the information is collected and an appraisal is completed on your new home, the lender will complete the underwriting of your loan. Your loan officer will work closely with the underwriters to follow your loan through the final process.

5. Prior to Closing
There are a few more things you need to prepare prior to closing. You will need to purchase and provide a paid binder for Homeowners Insurance. Most lenders will require you to pay one year of insurance premium up front. Your loan officer will provide you with a Good Faith Estimate that outlines what the Closing Costs involved with your loan will be. Often times these costs can be rolled into the loan as part of a seller concession – work with your realtor and loan officer if this is an option you wish to pursue. In most circumstances you will also need to have a Down Payment, but there is a good chance you may be able to finance the entire purchase price of your home. Your loan officer will provide you with your best options. If you are paying your closing costs and down payment out of pocket, you may need to provide proof of your deposits or proof of gift funds.

6. Closing
The closing for your new home will take place at a Title Company and will typically be attended by the Sellers, the Sellers agent, the Sellers closer, your Agent, your Loan Officer, your closer, and you. Your Loan Officer will arrange the closing and inform you of any money or other items you need to bring to closing. At the closing you will sign documents that transfer the title and deed to your name, and loan documents that indicate your promise to repay the mortgage obtained securing your new home. The lender will issue funds to the seller for the purchase price and you will provide a cashiers check for any closing costs and down payment that you are paying out of pocket. Once all documents are signed and money transferred, you are a new home owner!