Getting Started - What you need to know!
Buying a home is a big step, it's complicated and can be a little overwhelming. One of the most frequent questions we get is "what should I do first?" and "how do I get started?" So here are some tips to keep you in good shape and on the road to your new home!
Complete the Application - This step should take you about 10-15 minutes to complete. Your application gives my team the big-picture information to help us build your personal home loan strategy and provide you information on budget, loan options, monthly payments, down payment options, etc.
You can complete our application with the peace of mind that your private data is safe and is not going to result in a credit inquiry triggering solicitation calls (see soft credit pull info below).
It's time to complete the application and get qualified for your new home!
Soft Credit Pull
We prioritize your financial interests and are committed to safeguarding your privacy and ensuring your financial well-being.
Initial Application: When you complete your application, we conduct a single bureau SOFT CREDIT CHECK. This does not impact your credit score or result in an inquiry on your credit report. It provides us with a broad overview of your creditworthiness while protecting your data from third-party predators.
Opt-Out Service: Our soft credit check allows you the opportunity to utilize the opt-out service, ensuring the protection of your data and privacy. We believe in empowering you to make informed decisions about your credit information. (See Step #2)
Full Loan Approval: In order to provide full loan approval, a complete tri-merge hard credit inquiry (EQF, EXP, TU) is required. We will discuss this with you in advance, explaining the reasons and seeking your consent before initiating the hard pull. We value open communication and collaborative decision-making based on your needs.
Our ultimate goal is to protect your financial interests while delivering the best possible service. If you have any questions or concerns about our credit check process, please feel free to reach out to our dedicated team. We are here to provide guidance and support every step of the way. *NOTE: FHA loans are ineligible for AUS Underwriting with soft pull, may require a hard credit inquiry.
Protect your data - I always recommend protecting your data as soon as you have completed the application. There are a lot of predators and pushy salespeople and you may be surprised that they obtain your information through the inquiry on your credit report when you apply for new credit. Good news though, you can opt out and keep your information from being sold to dozens of 3rd parties.
Be careful with the online home search sites as well. It's OK to look but if they ask for your contact info most likely it will be sold to multiple real estate, insurance, and mortgage providers. Instead use the link provided by your realtor for more accurate info without the annoying telemarketers. You can also use my search engine to ensure your information isn't sold.
Schedule your Consultation - This is a key step that get's skipped by most lenders. Buying a home is the largest and most complicated financial transaction ever conducted for most people. We believe that a financial decision this big requires conversation and thought and push button, get mortgage is just irresponsible. A professional lender should be able to ask you questions and create a strategic mortgage solutions built around your top priorities, needs and goals. Did you know that two different loan options with the same rate could vary tens of thousands of dollars in overall cost? Or that the lowest rate isn't always the lowest cost? Did you review available grants to reduce your financial costs, geo-options that could reduce your rate or costs based on the homes location or special finance incentives?
Don't get rushed into an option that doesn't fit your financial needs. If your mortgage doesn't fit you can't return it like a shirt on amazon. Let's take the time to get to know what you need and craft a plan around that. Want to talk it over before you apply? Happy to discuss your situation and how we can help anytime. Click here to schedule a consult.
As we work on your mortgage plan, keep in mind that you are not bound to anything. As things change, the plan may change as well and that's OK. We can always make changes to ensure your needs and goals are covered. We'll continue to dial everything in as we go to confirm we are on the same page and your best interests are always top of mind!
Upload your Documents - Our application system is intuitive and will automatically provide you a list of items needed based on the A.I. analysis. If you have already uploaded documents you are ahead of the game. If not, this is were we want to be pro-active and help you take the stress out of this process. Most lenders will require your documents once you are under contract. We prefer to get everything up front so we can verify income and assets and have you fully underwritten and approved. This way when you find your dream home we just will just need to order title work and the appraisal to get you all set for your new home. No stress, no worries, just a beautiful new home.
This also helps us give you an advantage in multiple offers since we can let the listing agent know you are all approved and good to go! We'll customize the list of the documents that are specific to you but here is the typical stuff but it will not all apply to you. Click here to view standard items needed.
Get your Mortgage Report - Our consult is going to give us an idea of what you want. Then we want to put that on paper so you can review the numbers and look at the options. Your custom mortgage report will analyze your situation and look at different loan options for you to consider. We'll review different options and analyze how those will affect you today and also graph out how each option will benefit you in the future and how that may relate to your long-term goals. My hope is that this prompts questions that you didn't even know you had so we can make sure everything is clear and we are moving forward in the manner that meets your needs best. Then we'll discuss which option meets your goals and works best for you and which ones we are leaning towards as your best mortgage solution.
Home Shopping - It's always a good idea to get the financing in place and make sure you are comfortable with everything before finding your new home. It takes away the emotional response to buy more than your comfortable with. Now that you know your budget, the payments your comfortable with your REALTOR can lock in on the properties that meet this criteria. If you need a an introduction to a great agent just let us know and we are happy to help. As your shopping we want to maintain the integrity of your approval so be careful about credit and spending.
& check out The 10 commandments of buying a home!
Know the up-front costs - If a lender is asking you for up front fees you should have some concerns. There could be some costs to other 3rd parties or deposits related to the purchase but nothing should be paid up front to the lender for their fees or services.
Let's take a look at the costs that may be required as you purchase your new home:
Option Fee - this is a fee paid to the seller for the option to terminate. It's your get out of jail free card. It allows you to cancel the contract for any reason and get your deposit back. Option fees are typically non-refundable and are a negotiated fee that is typically between $200 and $500.
Earnest Money Deposit - This is the up front deposit held in escrow until closing. This amount is included in the final numbers and deducted from the total cash to close. This amount is also negotiable and is typically between 1-3% of the purchase price.
Inspection Fee - While you are not required to order an inspection it is highly recommended. This is a fee paid to a licensed inspector who inspects and reviews the home for safety and functionality and then provides this to you in a report. It is best to conduct the inspection during the option period to ensure you are moving forward with the purchase. Inspection reports range between $450-$650. (The inspector may call out add'l items found that could require add'l inspections as well. For example if foundation repair is suspected they could recommend an engineers report, etc.)
Appraisal Fee - Appraisals are required by all lenders unless the property is eligible for a PIW (property inspection waiver). A licensed appraiser will come out to the home and compare it to other homes in the area to determine an opinion of value. The appraised value must meet or exceed the purchase price, otherwise the loan terms will need to be restructured. Appraisals are typically between $450-$650 but can be higher for very large or unique properties or properties located in remote or rural areas.
Survey Fee (maybe)- Survey's are required to ensure that the property is not encumbering another properties boundary lines, easements, etc. This item can be provided by the seller or the buyer depending on the contract negotiation. Often a previous survey is provided by the seller and as long as the title company accepts it no add'l survey is needed. If it is required that the buyer obtain a new survey in many cases the cost is added to the closing costs and not required up front however some title companies could require payment in advance. Most likely this will not be required up front but I wanted to include it as a possible item.
Other Fee's (maybe)- There can be other costs, depending on the type of property or situation, maybe a condo questionnaire fee paid to the condo association, maybe an engineers report if you want to make sure the foundation is sound. Feel free to contact us for advice before you pay any up-front fees regarding your new home purchase.
Outside of these costs you just have to be aware of the balance of your down payment and any closing costs. We go over all of these items in the mortgage report so that there are no surprises at closing.
Everything Else - Undoubtedly other items will come up as well. Did we mention it's a complex transaction? Remember, that's why were here, to answer your questions, look out for your best interests, and help guide you through this home buying journey. If you have any other questions or need assistance just contact us and let us know how we can help you best.