This is a brief description of the process and it only purports to show the most important steps.
To start off, you must get familiar with your credit report as it contains part of your credit history and that is going to have an impact on determining if your mortgage is going to get approved and if the interest rate and other terms are going to be favorable to you or not. If you haven't looked at your credit reports, you might be surprised at their contents, because errors are common.
The next step is to find the appropriate lender and the type of loan that best fits your needs. Spend some time finding a lender or a mortgage broker that you feel comfortable with, one that makes you feel confident, understands your personal situation and can assist you on this important financial decision.
Your financial history, credit score, current debt level, satisfactory paying record and other factors play strongly into the decision of a type of loan, the interest rate, and other conditions that will be laid out in the loan document.
Once all these variables are examined, the lender issues a pre-qualification letter, document that is a requirement when sending an offer, to prove to the seller that you are being considered for a loan of an amount equal or superior to the price amount being offered. This is a sign to the seller that the buyer is being considered for a loan by a financial institution and may feel now confident to continue with the transaction.
Buyer must determine beforehand the type of housing to look for (condo, townhouse, single family home, duplex, etc.), minimum number of bedrooms, pool or no pool, and other considerations and price within the pre-approved amount.
Next step is to find a qualified real estate agent with local knowledge of the market, with whom you feel comfortable, of good character, skillful in negotiating and creative enough to be able to deal with the day to day situations that always arise in the course of a transaction.
With the specifications laid out by the buyer, the agent is ready to do a search within the desired geographical area or neighborhood and send you the options found for your consideration. Once a few of them are chosen, the agent begins to make the appointments through the listing agent, prepared the route to follow and begin the on-site viewing of the properties.
When a particular house is chosen, the offer is drafted and presented to the seller through the listing agent. When approved by seller, the offer is now called an executed contract and the date on which the last of the parties signs is called the effective date. This date is important since the inspection period agreed upon and the escrow deposit begin to be counted from this date.
Within the inspection period, the inspection of the physical premise and the so called termite inspection take place. Buyer at his sole discretion may determine if he agrees with the results of the inspections. If not, a notice is given to the seller, the contract is terminated and the escrow deposit is returned. If financing, an appraisal ordered by the bank takes place. If the loan is not approved for any reason, again notice is given to seller and the escrow deposit is returned.
If all goes well, it is important to coordinate with the title company that is in charge of gathering all documentation and funds and to perform the closing of the transaction. Following the closing, the funds are disbursed to the interested parties such as the seller, the bank if a mortgage is being cancelled, the homeowners association, insurance company, the county, and commissions to listing and buyer’s agents, among others.
The transaction is finished and now the buyer receives the paperwork and keys of the house to begin enjoying what he is going to call Home from now on.
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