6 Months & Counting…
Collect your loan paperwork. Lenders are very particular these days when it comes to mortgage loans. They demand a lot of paperwork. What they want typically includes:
- W-2 forms — or business tax return forms if you’re self-employed — for the last 2-3 years
- Personal tax returns for the past 2-3 years
- Your most recent pay stubs
- Credit card and all loan statements
- Your bank statements
- Addresses for the past five to seven years
- Brokerage account statements for the most recent two to four months
- Most recent retirement account statements, such as 401(k)
If you start collecting these documents now, it’ll lessen the stress when it’s time to get your loan. Bonus: Looking closely at your paperwork each month will also help you stay focused on saving for your down payment and keeping your DTI ratio low.
Research REALTORS® and lenders. Start interviewing Realtors®, especially those who are buyer’s agents. A buyer’s agent will work in your best interest to guide you to the right houses to look at that fit your priorities, schedule showings and help you evaluate each one, prepare a purchase contract for the house you want, advocate for you and negotiate with the seller’s agent, and shepherd you through the complicated process to a smooth closing. Your agent can also be instrumental in suggesting lenders who are a good fit for you and won’t derail the process. And the coolest part is, you typically don’t pay the agent anything for his/her time!
3 Months & Counting…
Get pre-approved. At this point, your credit score, paperwork, and down payment should be on track. You’ve done your research on neighborhoods, agents and lenders. Now it’s time to start working with them.
Make an appointment with your lender and bring all your paperwork. They will do a credit check, evaluate your income and debts, and tell you how much of a loan you’re approved for. As suggested earlier, it often makes sense to borrow less than the maximum the lender allows so you can live comfortably and within your budget that accounts for mortgage payments, insurance, maintenance, and everything else going on in your family’s life.
Start shopping for your new home. One you’re pre-approved, your chosen agent will target homes that meet your priorities in your price range. This way you won’t be wasting time looking at homes you can’t afford.
Make an offer on a home. It can take more than one offer to get a house under contract, and then 30 days or so to close and take possession. So if you have a firm move-out date, allow enough time to deal with any hiccups along the way.
Under Contract & Countin…
Get a home inspection. One of the first things you’ll want to do after your offer is accepted is have a home inspector look at the property. A home inspector takes the time to closely evaluate the property in areas of health and safety, and typically finds something that needs repair.
Do the Due Diligence. Review HOA documents, Title, and Survey information. Arrange for property insurance via an insurance carrier and advise the lender.
Last Few Weeks and Counting…
Update the lender with all your financial documents and anything else required. If you’ve been keeping your documents up to date and your down payment is in reserve, these final steps are easy. Reviewing the mortgage documents and final settlement paperwork is now easier than it used to be, and your agent will help guide you through them.
Do a final walk-through. Do a final walk-through of your new home within about 24 hours from closing, to make sure the home is in the shape you and the seller agreed upon at contract and any subsequent agreements.
Get a cashier’s check or bank wire for cash needed at closing. Get the exact amount of cash needed for closing. You’ll get this number a few days before closing so you can secure a cashier’s check or arrange to have the money wired. Regular checks aren’t accepted.
Seal the Deal. The day has arrived! You meet at the closing office to sign all the transfer of ownership and loan documents. Woohoo!! Congratulations, new home owner!