Today's blog post is written by guest writer Nick VanVorst, a Senior Mortgage Loan Originator for Private Mortgage Wholesale out of Grand Rapids, Michigan.
Buying a home can be one of the most rewarding and exciting events in your life. It feels great to pay your own mortgage payment on a home you OWN each month instead of one that you rent.
There are many unknown variables in the home buying process, making it stressful and confusing. Having a good realtor and lending team can be very helpful and take the stress off of the buyer.
The basic steps to homeownership are the same no matter what city or state you live in.
10 Steps in the Home Buying Process
- Talk To a Lender and Get Pre-Approved for a Mortgage Loan: This will let you know what you can spend and what program you fit into (FHA, Conventional, USDA, VA etc.).
- Find a Realtor You Are Comfortable Working With and Sign Them Up as Your Buyer’s Agent: The Realtor will set you up with online home searches in areas you like for the price range you are approved for.
- Let the Open Houses and Walkthroughs Begin! Try to identify your "must haves" in your future home and work with your realtor to walk through homes you may be interested in.
- Find a Home You Like and Submit An Offer. Once you find a house you like that is in your price range work with your realtor to submit an offer. Remember, home buying can be an emotional process, especially when decisions have to be made quickly. Before submitting an offer take some time to make sure the home is one you actually want and that you are comfortable with the total mortgage payment (including the taxes and insurance). Remember, it is very likely your offer won't be accepted. Do your best to avoid making emotional decisions and getting too tied to one specific house. Be patient and wait for a home that is right for you.
- Inspections: Once your offer is accepted you'll have a home inspection done to determine if the home is physically and mechanically sound. If repairs are needed, decide what needs to be fixed and if you will ask the seller to help with the repairs or costs.
- Get the "Green Light" from your Lender: The lender orders the appraisal once they get the “Green Light” from the buyer to move forward with the home.
- Get Underwriting Approval: Your lender will have you sign the initial loan documents and submit the loan to the Underwriter for approval.
- The Loan is Reviewed and Approved (or Denied): At this point the Loan Officer works on gathering conditions to clear the loan for closing. Your lender will likely ask you for all kinds of documents including pay-stubs and tax returns. If you know you might be home shopping in the future be sure to keep your financial information organized so you are ready to get this information to your lender as quickly as possible.
- The Appraisal Comes Back: An Appraisal is an estimate of what the home is actually worth. Lenders require appraisals to make sure the amount of money being borrowed for the home is appropriate given the value of the house. The appraisal will either be at value, above value, or below value depending on the purchase price of the home and comparable sales in the area. The appraisal is then reviewed by the Underwriter.
- Head to the Closing Table! The Underwriter issues the approval to close on the house and all parties go to the closing table to sign the final documents.
- Congratulations, you Home Owner!
About the Author
Nick VanVorst is a Senior Mortgage Loan Originator for Private Mortgage Wholesale out of Grand Rapids, Michigan. Nick started his career in the Mortgage Industry in 2004. To learn more about Nick, visit his website.