Purchase Mortgages Explained

Purchasing a home

Buying a home is probably the largest investment you will make, not to mention a commitment that you will keep for for years to come. A purchase mortgage is nothing more than the loan used to buy a home or property. Although some people may say that buying a home is the most stressful task they had undertaken, with the proper knowledge of the mortgage process, you can ensure yourself that the transaction will be smooth and painless.

Step 1:
cheap cigarettes Getting Pre-Approved For a Home Loan
Pre-Approval –What is it?
When you are in the market for a new home there is no greater negotiating tool than the Mortgage Pre-Approval. With this valuable instrument in hand, it shows all parties involved in the real estate transaction that you are serious, ready and have been pre approved for home financing. It is becoming common practice for real estate agents to ask that you get a Pre-approval Letter from a Lender before they will even show you a home. There are some mortgages terms that may seem alike but differ in their importance.

Step 2:
Choosing your loan program

Once your loan application is pre-approved, our Lenders will review the loan options that are available to you. They will help you determine what type of loan is best-suited to your financial and personal situation.

Once you choose your loan program, your Lender will issue you a pre-approval letter. Your Pre-approval Letter will include your maximum financing, your loan program details and your monthly payment. You can use this letter to go shopping for your new home.

You should consider:
Your financial situation
How much money do you have for a down payment and closing costs? Will this totally empty your bank account? You may want to consider a loan program that allows you to put less money down so that you have some money in reserves.

The length of time you plan on staying in the home
Most first time homebuyers sell their homes within the first five years of purchase. You may not want to spend a lot of money on points to get a lower rate on your mortgage because you will not be in the house long enough to recoup your savings. Also, you may want to consider an arm that has a lower monthly payment.



Step 3:
Going House Shopping

Once you have been Pre-qualified, choose your loan program and have been issued a Pre-approval certificate, it's time to go house shopping. It is recommended that you seek the services of a professional real estate agent. If you need help finding a realtor in your area, our Associates will help you with our Realty Referral Program. Ask for details.

Once you have found the home that meets all of your needs, you will negotiate a sales price and then sign a sales agreement. Many homebuyers have an attorney review this contract to make sure everything is in order.

You should consider:
Your real estate agent
Be sure to use a real estate agent that works for you. Your real estate agent should be knowledgeable and familiar with the area that you want to purchase your new home. The best way to find a good real estate agent is to ask for referrals. Pick an agent that wants to work with you in fulfilling your home purchase needs.

The length of time you will remain in the home
If you plan on never moving again, will this home meet your needs? Do you plan on moving in a few years? Are you planning a family or will your income increase over several years? It is important to know how long you plan on staying in your home before you purchase.

The neighborhood
Don't make the mistake of purchasing a home in a neighborhood you know nothing about. Will this neighborhood meet your needs? Ask the neighbors the true story about the neighborhood.

Type of Property
Are you looking for a single family home, a townhouse, or condo? Before you begin your house shopping, decide what type of property that will satisfy your needs. Also don't purchase a house that may be hard to resell. When you are looking for a home, think about how you would sell it!


Step 4:
Processing & Final Loan Approval

Now that you have found your property and have a signed sales agreement, it is time to process your loan application with your Lender for final approval. This step gathers and verifies all the documentation for your loan. A real estate appraisal will be preformed to determine the value and condition of the property you are purchasing. Your title work, a survey, a house inspection (not the same as an appraisal) and a termite inspection may also be ordered.

Once your file is complete, it is sent to underwriting to validate the documentation provided by you. The underwriter may request addition documentation at that time. Most Lenders' use automated underwriting systems. This allows the lender to speed up the lending process.

Once your information is validated, you will be issued a final loan commitment. Then you can schedule your settlement.

You should consider:
Providing Documentation
Be sure to give yourself plenty of time to process your loan. Time is of the essence. When documentation is requested, it is in your best interest to forward the information to your Lender as soon as possible. Often times, your file can not be moved to the next processing step without the necessary documentation. Providing documentation on a timely basis will make your loan application process much smother.

Coordinators, Loan Processors, Mortgage Representatives
We realize that the lending process can be very stressful. There is a lot of work to be done. That is why our Lenders have an informed staff that will help you through every step of the way. If you need assistance with any matter, make sure to contact your Lender directly.


Part 5:
Going to Settlement

This is the final step in purchasing your new home. This step is the actual closing of the real estate transaction between you and the seller of the property. Generally, the settlement takes place at the title company. All of the interested parties meet to sign the final documentation. You may be in the room with the seller, the seller's real estate agent, your real estate agent, your attorney and if the seller brings an attorney. This final step will need to be coordinated with all partied involved.

Once all of the settlement papers are signed and monies are exchanged, you receive the keys to your new home, along with copies of all the closing documents. Congratulation- You are now a proud new homeowner!

You should consider
Your down payment and closing costs:
Request a copy of the HUD settlement statement prior to your closing. This form summarizes the entire financial transaction. It will also let you know the amount you will need at the settlement table. In most cases you are required to bring certified funds to the settlement. You do not want to be short money at the settlement table.

Your Timing
If you are currently renting now, planning the move to coincide with the end of their lease often creates a big dent in the budget. Check with your landlord about an early release or extension of your lease when you consider buying your first home.