Buying a Home

Perhaps the whole process of buying a home is just overwhelming and complicated that you won’t even allow yourself to daydream about home ownership. You may go through life thinking that you could never buy a home. Maybe you think you can’t afford it, or they think that your credit isn’t good enough.

This article is a great start to get you thinking comfortably about buying your home. We’ll walk you through all the steps to achieve home-ownership. There are also plenty of resources out there to explain the process as well, yet I tend not to recommend any since most have the order of the recommendations in the wrong order. Most of them have you thinking about the type of property you want before knowing how much you can afford, and that’s where the frustration begins for most folks. But once you are done with this article you’ll be ready to schedule an appointment with us. In short, don’t let these unknowns deter you. This article and an appointment can unlock the mysteries of the process and enable you to buy your first home without feeling too lost or overwhelmed.

This step-by-step explanation of the home-buying process, you will learn everything you should be thinking about and doing at each point of the process. The process may still be difficult, stressful and draining at times, but at least you’ll know what to expect and understand what’s happening at every point along the way. At the end of the day, is your choice, you can stop throwing money away in rent and start putting money in your pocket every month when you pay your mortgage payment.

You need to understand the basics

The biggest hurdle to buying a home for many families is coming up with a down payment, especially when home values are increasing quickly. But various programs exist that might make this task easier for you. The most common programs in the market now require between 3.5% -5% down payment plus closing cost. In most cases, the lender may be able to help you with some of the closing costs. Although keep in mind that when you finance more than 80% of the property costs you will need to pay an additional fee for Private Mortgage Insurance (PMI) at closing(will be financed usually) and a monthly premium will be added to your mortgage payment. For more information about PMI please follow the link.

First-Time Home-buyer Programs in Your State/County
Your state or county may have programs that make home ownership more affordable. Search online for the name of your state or county plus “down payment assistance program” or “home-buyer program” to see what’s available near you. If you work in a public service profession, additional programs may be available to you.

Section 184 Loans for Native American Homebuyers
American Indian and Alaska Native homebuyers may qualify for the Section 184 Home Loan Guarantee Program offered by the US Department of Housing and Urban Development (HUD). Borrowers can put down as little as 2.25% on home purchases of more than $50,000. They also must use a Section 184 approved lender and pay up-front and annual mortgage insurance premiums. By promising to repay the lender if the borrower ends up in foreclosure, HUD encourages lenders to assist this group through low-down-payment loans with relaxed underwriting standards.

VA Loans
Even though this is not a program specifically for first-time buyers, Veterans Administration loans don’t require any down payment, so qualifying military service members should investigate this option. VA borrowers must pay a one-time funding fee, but they do not have to pay mortgage insurance premiums.

Retirement Account Loans and Withdrawals
If you have a retirement account such as an IRA (Traditional or Roth), 401(k), 403(b), or any other deferred retirement account, you can withdraw or borrow money to fund your down payment. Keep in mind that by taking this option you may end up doing serious damage to your long-term finances by taking this route. The rules and consequences depend on which type of retirement account you want to tap and whether you’ll be able to repay the money you take out.

• With the above information and a few things you need to gather, you’ll be able to take your first step to home ownership and schedule an appointment. For the appointment you will need the following information to start the process of getting prequalified:
  Driver’s License
  If not a citizen, you’ll need your Permanent Resident Alien card
  Social Security Card
  Last two paystubs
  Last two month worth of financial statements (Checkings, Savings, Brokerage, and Retirement)
  Last two years income tax returns
  Last two years’ W-2/1099 forms

Once you have come in and met with one of our loan officers, You’ll have a better idea of what your maximum purchase amount is based on each of the programs you qualified for. With that information, we recommend that you find a realtor that can cut the amount of time considerably for you by find you properties based on your locations, needs and wants within your price range.

We will issue you a prequalification letter from MCL that your realtor can use additionally when presenting offers to the listing realtor. This will give your contract ‘a bigger weigh’ more than the others which may not be sent in completely. Giving you better odds at winning the offer when there are multiple bids for the property.

Once your realtor receives a completed contract, he/she will forward us a copy in order to submit your loan package to the bank. If there was a gap in time between our meeting and the contract getting completed, then we would need to update any paystub and/or statements so that they can reflect the most current information. We will shop from our database of lenders for rates and programs and once our selection has been completed we would submit the package.

Once the Bank receives it, they will start processing it and will go through a couple of departments (Quality Assurance) and they an underwriter will be assigned to it. The underwriter usually takes within 24 – 72 hrs to review the file and give us a response. The underwriter’s response can be:
Approved – with conditions.
Declined

The simplest way to explain conditions from an underwriter is that these are doubts that the underwriter has and we clear them via written explanations or supporting documentation.

There are external and internal conditions. External include any doubts that the applicant would need to address or provide additional information on. Internal conditions will be addressed between the Loan Officer, Processor of the loan, title company, insurance company, and inspection company. We will make this process as transparent and fluid as possible in order to avoid delays for you since you are on a contract with time limits.

Once all conditions are met, we will receive the clear to close from the financial institution and schedule the closing date and time with you. At this time your realtor will schedule a final walk through the property with you to make sure everything is in the conditions you saw on your initial viewing.

Upon closing, your realtor will make an arrangement with the listing realtor to obtain the property keys and deliver them to you.

Congratulations!!!