September 3, 2014
Buying a house is a memorable experience, and knowing what to expect will help you in your journey. We've outlined the most common steps in buying a home including details that you will find useful as you proceed in the process.
What happens after you've found your perfect home?
- Apply for a mortgage pre-approval
This will make sure that when you put in an offer, you have a solid standing with a mortgage lender who can vouch for your financial situation.
- Make an offer
Although your agent is there to assist you in deciding what to offer, generally you will be the one coming up with the number! The seller might make a counter offer at which point you generally are free to counter that or walk away and continue your search!
- The Seller accepted your offer
After you and the seller have come to an agreement on the terms of the purchase, your agent will make sure your purchase contract is reviewed by your attorney prior to you signing the final version. They'll make sure important terms and conditions are there and that your best interests are being taken care of.
- Schedule an Engineer's Inspection
Both you and the Seller's Agent will need to be present for the inspection, which will take about 2 hours. The inspector will prepare a report that will outline the general condition of the house and point out areas that might need attention. If there are glaring issues, the report will give you the backing you need to potentially get credit from the seller to repair the issues.
- Apply for the mortgage
Here is where you will have a clear picture of the payments, fees and closing costs.
- Property Appraisal
After the engineer's inspection an appraisal will be scheduled on the home, by the lender, to assure that the house can be used as collateral against your loan.
- Arrange for Home Owner's Insurance
You'll need to have this in place prior to your Closing!
- Schedule a Closing Date
When all the documents have been received and approved by the bank, you and your Loan Office will coordinate a Closing Date with the Closing Attorney!
How do I figure out how much I can spend on a home?
To help determine an amount you may be able to spend on a home, we have
a pre-approval process.
To proceed with a pre-approval, we will need the following financial items from you:
- Pay Stubs -To find out what your price range is
- W-2s and Tax Returns -What your approximate monthly price range is
- Bank Statements -What your interest rate may be
- Credit Report -To see if you will have the cash to pay forclosing expenses on the house.
Types of Home Mortgagesoffered by Premium Mortgage Corporation
- FHA Mortgage -- Insured by the Federal Government, these are usually 15 or 30 year fixed rate mortgages that have lower down payment requirements and do not rely as much on your FICO scores as a Fixed Rate Mortgage.
- 203K -- This loan can be used by those who are purchasing a "less than perfect", owner occupied property. The final mortgage amount will include funds that the homeowner will use to repair the home.
- VA Loans (US Veterans) -- These loans are available to those who have served in our nation's armed forces and, in certain cases, to spouses of deceased veterans and require nodown payment.
- Rural Housing (USDA) -- 100% financing for homes located in designated rural areas of each county in New York State. Designated areas are constantly changing based on income and population growth in each town.
- Conventional Fixed Rate Mortgage -- can be a 10, 15, 20, 25 or 30 year term and has a fixed rate for the life of the loan.
Financing Examples of Common Loans
FHA Mortgage - 30 Year Fixed*
Purchase Price $100,000
Down Payment 3.5%
Cash to Close $11,726.92
Equal Monthly Installments: $979.92
Conventional Mortgage - 30 Year Fixed*
Purchase Price $100,000
Down Payment 5.0%
Cash to Close $13,195.79
Equal Monthly Installments: $898.52
Rural USDA Mortgage - 30 Year Fixed*
Purchase Price $100,000
Down Payment 0%
Cash to Close $8,234.88
Equal Monthly Installments: $942.27
*Estimated Equal Monthly Installments includes: mortgage, taxes, and all insurances. Estimated Total Cash to Close includes: down payment, closing costs, and first year property taxes. Actual amounts may vary and will depend on factors such as down payment, rate and credit worthiness among others. Not all buyers will qualify. Rates subject to change without notice. This is not an offer to lend. A loan is not guaranteed. Rates Quoted are for Primary Dwelling Loans. Contact Premium Mortgage Corporation for further information about rates and fees.
Ways to procure down-payment and closing costs may include:
- Borrow from your retirement plan
- Monetary gifts from family
- Move/relocate to more affordable housing
- Reduce your outstanding debt
- Strike a lower deal with the seller
- Sell stocks/investments
- Obtain additional employment
- Skip vacations and entertainment expenses