Purchasing Your New Home
The United States’ real estate market is currently in an upward turn that proves that the economy is once again booming. Interest rates are extremely low and there is a good number of inventory on the market for buyers to choose from. Many people are looking to purchase a new home, however, many are uncertain of the steps to take to make this desire a reality.
PICKING A REALTOR AND OBTAINING PREAPPROVAL STATUS
The first two steps in the process of purchasing a new home are picking a local Realtor and obtaining a preapproval status on a mortgage. These steps are often done at the same time to help save additional time later on. Some people choose their Realtor first.
This is a great step for people who have no idea which financial lending institution they wish to do business with because many Realtors already have business relationships established with various bankers and brokers.
Lending institutions will require various information prior to providing a preapproval loan status. This information will include things such as the individual’s personal information and work history. Credit reports will be ran and bank statements will also be reviewed. Your credit score as well as the current rates can change dramatically in a short period of time.
This is also a great time to find out what current interest rates being offered are. These rates are usually determined by the borrower’s credit history and down payment amounts. Different types of loans have different requirements. FHA has updated their loan limits for 2020 for instance. Prospective borrowers can also expect to receive a Good Faith Estimate based on the loan amount they are seeking to obtain.
FINDING A HOME
Once you have chosen your real estate agent, and obtained the preapproval status on a mortgage loan, you can begin searching for a house. The preapproval status will allow the prospective buyers the knowledge to know which houses they can afford to purchase. It will also help your offer look more attractive to a seller who may have multiple offers on a property.
APPRAISAL AND FINAL APPROVAL
Once you have found your dream house, you, or your Realtor, will need to go back to your lender with the property information. The lending institution will then order an appraisal to be completed on the subject property. This appraisal will be done by a licensed real estate appraiser who has a reputable relationship with the institution. This process may take a few days, to a week, depending on the appraiser’s schedule and access availability to the property.
Once the lending institution has received the appraisal, they will continue processing the loan documents. This includes sending the entire file to their underwriting department who will give final say over the loan approval. This process may also take some time as the underwriter will thoroughly examine the information provided on the subject property and potential buyers.
The closing of the transaction is a series of events in itself. Once the loan has final approval the loan documents will need to be drawn up. These documents will then be taken to the title company, or Realtor’s office, where the closing will be scheduled. Typically, the buyers will do a final walk through of the property at this time. This insures there is no new deficiencies that arose after the acceptance of the offer.
During the closing, both parties will sign the various documents that are necessary to record the change of ownership. These signatures are often obtained at separate times, rather than everyone meeting at once. When all of these signatures have been obtained the buyers will receive the keys to their new home. The final step in this transaction includes the title agency recording the necessary documents with the appropriate court reporting department.
The only thing left to do in this process is to move and begin the new journey. Many times the people who are in the process to sell a home have already vacated the premises. However, this is not always the case as many people must first sell a home before they can buy another one. Moving in also includes having the utilities switched over to the new owners’ information. Some utility companies will wave deposit fees with proof of the new ownership information.
One of the most important moments in a person’s life is when they buy a home. People gain a sense of accomplishment and pride in the journey to buy a home. It is also one of the greatest means of wealth in this day and age.