Before making an offer
Whenever you make an offer, you will need a pre-approval letter from a mortgage lender or bank stating that they pre-approved you for a certain amount for a mortgage. If you are paying cash, then we will need proof of funds to submit with the offer.
It’s a good idea to get pre-approved early on so that you know what price range you should really be shopping in. Whoever you get the pre-approval from is not the place you necessarily need to get your mortgage from so don’t be too concerned about that. This can be done online or over the phone and shouldn’t take long. The mortgage broker will ask you some questions and pull up your credit and according to that will let you know how much you will be able to borrow.
Making the offer
To write up an offer I will need to know how much you will put down and how much you will borrow. Normally people put down 20% but it can be done with less or with more down too. Generally, if you put down at least 20% you do not have to pay PMI (private mortgage insurance). After we negotiate back and forth with the price with the seller, we then settle on a final purchase price. Then the contract that we wrote up is revised with the new price and it is signed by the buyer and the seller. The contract then goes to both buyer and seller’s attorneys.
Attorney Review
Attorney review starts and that usually runs about 3 business days. This is the period that changes are made to the contract to protect you. This is also the time that things can be added or removed from the contract that we originally wrote. Also, during this period, the seller can accept offers from other buyers if they choose to, so I usually like to not waste too many days on this if we don’t have to.
Under Contract
Once attorney review is over, the house is then officially “under contract”. We start to count 10 business days from this date and that is when the buyer’s first deposit is due (usually 10% of the purchase price). During these 10 days the buyer schedules their home inspection. This is done quickly after attorney review is over.
Weeks leading up to closing
At this point everything but the mortgage is finalized. You are usually working on getting all the necessary paperwork to complete the mortgage application so that you can get your mortgage commitment. Try to not buy any large items as to affect your credit score before closing. Your lender will advise you better regarding what your spending habits on credit cards should be before closing. At this point the lender has already sent out an appraiser to the house to make sure the value of the house is justified (by using sold comps) for them to lend a certain amount to you.
When we get an actual closing date and time confirmed from the attorney then it is time to call the utility companies to set up your accounts. We will do a final walk through of the house before you go to the closing. If you are buying your house with a mortgage, then you will have to attend the closing.
Time to move in.
Home Sweet Home…