Buying a Home
Buying a home will be the biggest purchase of your life. It makes sense to do your research and really break down what to be prepared for. No need to be overwhelmed – as it is our job to make sure you can enjoy the process!
Step #1: Find a Lender you trust.
Academy Mortgage prides itself on taking every detail of what our clients need and want into account. We understand how important a home investment is to you and the impact it will have. Our team of experienced mortgage professionals will make every effort to find a program and pricing for your situation. Our sole focus is on you, and you can count on us for exceptional service.
Finding a lender is a crucial step in the home buying process. Not only do you have to be pre-approved* before you can receive a loan, but the most important step is knowing you can trust them! Read reviews, schedule meetings, take your time with this decision.
We like to think this is not just a service, but a relationship! Your lender will be communicating with your real estate agent and other parties involved in the transaction while keeping you updated.
* Pre-approval is not a commitment to lend.
Step #2: Application & Gather Documentation
There are a few things to know to qualify for a home loan.
(These are all things your lender can explain to you.)
This includes credit score, debt-to-income ratio, income, down payment source, assets, stability, ETC. If you’d like to learn these more in detail, feel free to visit our Learning Center for a breakdown.
Your lender will need some financial documentation – a lot of financial documentation. This is mandatory for your file to eventually be active and in transition. However, this also is needed during Pre-Approval* that way your lender knows the exact numbers when it comes to income and assets.
* Pre-approval is not a commitment to lend.
Among the documents you’ll likely be asked to supply:
Letter of recommendation from the previous landlord (if you’ve been a renter)
Mortgage Statements to all properties owned (if any)
Divorce Decree or Child Support Statements
Insurance Provider Contact
ID (preferably driver’s license)
The last two years’ worth of Tax Returns and W2s
Paystubs/ Proof of income for the last month
Bank Statements (all pages) for the last two months
Proof of funds for the down payment and close (or a gift letter, if someone is giving you money)
Hey.. we said a lot of financial documentation.
The lender may have more documentation requests as they process your loan, but these are the basics and will get you started.
Step #3: Pre-Approval*
WOO-HOO!!!!!! You’re Pre-approved*! Congratulations! We will go ahead and type up a “Pre-approval* Letter” and can send this once you choose your Realtor (next step). We like to say this is your “golden ticket!”
A Pre-Approval* letter is good for 90 days and gives you the OK that we are offering to lend you a loan. This is an offer, not a commitment or guarantee. However, this “golden ticket” allows you to go to the next step.
* Pre-approval is not a commitment to lend.
There can be justification for buying a home without a realtor, however, if you want the most “stress-free” option- we highly recommended having one. Your Realtor can provide valuable information on market conditions, pull up comparable sales to help you see whether a house is worth the asking price and whether it’s been sitting unsold for a while, help you prepare your offer and counteroffers, and works for you in negotiating!
We work with some of the best realtors in town and can refer you to someone we trust and know you will too! The right agent can make all the difference between a smooth search and buying experience, or a frustrating one.
Step #5: Dream Home List
Time to go house hunting.
Your realtor will be your best guide through this step of the process, but don’t be afraid to trust your gut. Never feel pressured to decide right then and there. Take a night’s rest, talk about it, and be 100% confident it’s “the one”.
Be mindful of any timetable you may be working with. Normally it takes 30-45 days to close on a home. If you want to be settled before the start of a new school year, or your previous house is on the market (or your apartment lease is expiring), you may not have the luxury of searching for months on end. Also, to keep in mind, are you interested in building? There are certain builders in your area that have model homes for you to schedule a time to see and tour. This could be a great option for your family as well if you are looking at a timeline to move in 6+ months down the road.
Making a “Dream Home List” may be beneficial when shopping for a new home. This can quickly eliminate the ones that aren’t quite right for you and focus on the ones that are.
Step #6: Make an Offer and Negotiate
You’ve found “the one,” took a deep breath, and decided to buy it? Your realtor will once again be the expertise on walking you through how to make an offer on a house. They will know the market and advise you on what the right offer to submit will be. You may have to go back and forth in negotiations for several days; that can be frustrating, but it’s all part of the “game” and the bargaining will be forgotten once your offer is finally accepted. You’ll have to include a check or money order with your offer to show that you’re serious about the deal. This is called earnest money. This can be anywhere from 1-3% of the purchase price, or it could be a fixed amount like $2,000 or $3,000. In a slow market, it could be much less. This money is held in an escrow account and applied to the purchase at closing. If a deal falls through because of a problem on the seller’s end, you get your money back, but if it’s on your end they very well may get to keep that. Therefore, it is so important to be prepared before making an offer.
Step #7: Arrange for Financing
THE SELLER ACCEPTED YOUR OFFER! CONGRATULATIONS!
This is your and your realtor’s signal to send the completed contract and call your lender. Your lender will then order all the things necessary for your loan to become an active loan. The process for your loan to become final approved goes through multiple different professionals. Such as the Processor who makes sure the Insurance, title, and taxes are all taken into account. Also, the Underwriter who crunches the number and comes up with questions as they go through your financials in full detail may make several requests for more documents, or for letters of explanation if there are any specifics, they find problematic and need further clarification. Final approval may not come until shortly before the closing date, so don’t panic. The lender is going to be committing a huge amount of money and wants to be 100% sure you’re a good risk.
Contact Us For Financing
Step #8: Home Inspections and Appraisal
We organize this step, but no purchase should be completed without having a house inspection performed. This will assure you that there are no hidden structural or functional problems with the home. A home inspection could find minor problems like electrical or plumbing issues, or more serious problems like mold or a cracked foundation. It’s up to you whether the issues are serious enough to back out of the deal, to demand that the problems be repaired before closing, or agree “as is” and over the repair expenses on your own.
However, it is the buyer’s (your) responsibility to pay for the inspections unless otherwise said on the contract.
Step #9: Closing on Your New Home
Before the final day, make sure that you have a certified check or scheduled a wire payment for your down payment and closing costs, your homeowner’s insurance is in place, and you have a written “binder” proving it, and you have your ID with you.
The closing process itself is sometimes completed in person. If you have an attorney, they should be with you at the closing to read all the documents before you sign them, and if you can’t attend an in-person closing you can assign your power of attorney. Just be sure to let the loan team and realtor know ahead of time.
You’ll experience a mixture of anticipation, nervousness, and before you know it- you are a HOMEOWNER!
All the craziness and stress WAS worth it.
Step #10: Move in and Enjoy!
Feel free to contact us or your realtor ANY time after closing. Have any questions? Thinking about investing in a rental property? Have someone you’d like to refer?
Any referral or review of our service is very much appreciated.
Thank you for choosing Academy Mortgage. Hope to hear from you again, soon!
Ready to Buy a Home?
Please, contact the experts at Academy Mortgage Yuma for more information about home financing or refinancing.