Buying your first home can be a stressful experience, but it doesn’t have to be if you anticipate issues that will come up and plan ahead. How much can you afford? What type of mortgage loan do you need? What is your credit score? Do you qualify for a loan based on your income?
All of these questions can and should be answered by a mortgage professional. At Opportune, Inc. we will help you find the answers and be at your side as you go through various steps of the process. But plan your strategy and don’t wait until the last minute. Contact us several months before you plan to purchase a home. Opportune, Inc. can help you avoid many pitfalls in the process by making sure that you are prepared.
Where do we start? Take a look at our checklist to buying a home:
1) Do the research
We will help you identify the type of home that is best for you, whether it is a detached house in the suburbs, a condominium in the city, a primary residence or second home, or an investment property. We’ll also help you identify many factors that may be relevant to your planning, such as your overall financial status, requirements for schools if you have children, your type of social life, proximity to public transportation and highways, and socio-economic trends in the geographical areas that you’re considering. In addition to working with Opportune, Inc. professionals, we encourage you to do further research, including talking to people who live and work in these areas. After all, information is power.
2) Get pre-approved
The importance of getting pre-approved for a mortgage is paramount. Not pre-qualified, but pre-approved. There is a difference. Pre-approval means that you will receive the loan subject to the real estate appraisal and other related factors. Pre-qualification, on the other hand, may not be worth the paper it is written on in many instances, because all relevant details are not always considered.
I always tell my clients that meeting with me to get the pre-approval process underway should be like going to see the doctor. I need to know everything about the client’s financial health. It is not in the borrower’s interest to withhold information – because every detail, no matter how insignificant it may seem, has the potential to impact the chances of getting a loan.
You’ll need to bring your recent paystubs, W-2 forms, tax returns for a couple of years, bank statements for a couple of months and a few other documents depending on your particular situation. At Opportune, Inc. we will obtain your credit report and make a recommendation if we see something notable. After we analyze your financial information, we will submit your loan for automated underwriting, which will generate a final decision on your loan eligibility based on the information provided. If you receive a favorable decision, Opportune, Inc. will issue a letter of pre-approval. This is your “green light” to purchase a home.
3) Build a strong team
Your team will consist of a mortgage broker, a real estate agent, an attorney and an insurance agent. Do not settle for mediocrity. Make sure you are represented by experts in each field. An expert mortgage broker at Opportune, Inc. will make sure that you get a good loan at a good rate and will work with you to make sure that this process – one of the most important financial decisions of your life – is as painless as possible on your way to becoming a proud homeowner. A good mortgage broker adds a lot of value to the homebuying process.
Your real estate agent will provide information on properties including real estate taxes and comparable sales and ultimately negotiate the contract for you. The agent will also coordinate the inspection and final walk-through of the home you wish to buy. Choose an expert in the specific geographical area you have in mind; an agent who sells only in the suburbs may not be the right choice if you’re looking to buy a condominium in the city. Hire someone who adds value to your transaction by making informed and helpful suggestions and recommendations as well as having excellent negotiating skills.
An attorney will be an integral member of your team and will review the contract to make sure there are no potential problems, walk you through the process and represent you should problems arise. Always hire an attorney who specializes in real estate in order to get the best advice and representation.
An insurance agent will set you up with a homeowner’s policy. Shop around for the best policy at the lowest price. There can be considerable price differences among agencies offering similar products. Don’t settle for just one quote.
4) Find your home
Whether it’s love at first sight or a long search process, take as much time as you need to find the right property. Consider the following: Are you willing to spend time and money to renovate the home to your specifications, or would you prefer a turn-key property that’s good to go as is? Do you like the neighborhood and its surroundings? Take the time to research schools (if relevant), local businesses and government, property taxes and proximity to infrastructure. Information is the key to making the right decision.
Then work with your real estate agent to make an offer and negotiate the best price. Hire an inspector to go through the property with a fine-tooth comb to make sure there are no hidden defects that will be costly to correct.
5) With your offer accepted, formally apply for a loan
The gears are in motion, and it’s time to act. According to your contract, if you are applying for a mortgage loan, now’s the time to complete the process. Your mortgage broker at Opportune, Inc. will send your file to the underwriter, and the decision process can take a few weeks. When your file is approved and the appraisal is received, your file is ready to close. The closing is scheduled by attorneys based on the date in the contract. Sometimes these dates may change if everyone agrees.
Your Opportune, Inc. broker will remain in close contact with you, your real estate agent and attorney as well as with the seller’s team to keep all parties updated. It is very important that all contract deadlines, including the mortgage contingency and closing dates, are met. Missed deadlines can generate a domino effect if the deal fails to close.
During the process, you may need to pay a management company for the appraisal. You should receive a copy of the appraisal report as soon as it is available. Your attorney will examine the title policy to make sure there are no undisclosed liens or other encroachments on the property. Then you are ready to close!
5) Close the deal
Closing should be a happy occasion. Get your wrist ready, as you will need to sign a multitude of documents that your attorney will explain to you. A few days before closing you should receive instructions on where to transfer funds. To avert fraud, never wire funds until you contact the title company representative and your real estate attorney to confirm transfer instructions.
Your Opportune, Inc. broker will celebrate with you when you receive your keys and garage-door opener at closing. Buying a home shouldn’t be stressful- it should be joyous!
You now own your home! Enjoy!