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Sometimes the most intimidating process of buying is home is just that: the “buying” part. Most people can pick out what they want in a house: what neighborhood they’d like to live in, number of bedrooms, number of bathrooms, size, and era of the home. Actually getting approved for a mortgage, deciding how much you’d like to spend, all the paperwork that has to be submitted, and completing the transaction can be intimidating. With the help from mortgage consultant Chris Johns over at On Q Financial, here’s a quick summary of what you can expect.
First and foremost, there will be paperwork – copious amounts of paperwork. Homebuyers will have their credit pulled and need to bring in all initial documents in to your mortgage consultant. This includes tax returns, W-2’s, paystubs, and bank statements. This will allow your mortgage consultant to talk with the bank to see how much you can get pre-approved for and with what interest rate.
Sometimes a bank will approve you for a larger loan than you can realistically afford while maintaining the lifestyle you want. Buying a home should not make you go broke, so when determining how much you would like to pay, consider the home’s total cost as well as the monthly payment. It’s also very important to consider all expenses, including property taxes in your chosen neighborhood, homeowner’s insurance, cost of any desired improvements, closing costs (typically 1 ½ – 2 % of the purchase price), as well as the cost of utilities and HOA dues. On the other hand, you may be approved for less than you expected. In either case, meeting with a qualified mortgage consultant will help you determine how much home can actually afford. The right mortgage consultant can help you realize if you have champagne dreams on a beer budget, or vice versa.
From the time you find a home and an offer is accepted by the seller, the process of getting the loan approval to complete the transaction can take up to 30 days. Even when you feel like time continues to pass with no progress, remember the approval process takes time. Be patient. Your mortgage consultant will contact you if there are any issues.
If you are buying and selling a home at the same time, communication is a key component in ensuring a smooth transaction. Your mortgage consultant will need to be kept up to date on the loan status of the buyers for your current home. If possible, it is most convenient if the same loan officer can handle both transactions.
Many home buyers are most surprised by the amount of paperwork required in the process. It is imperative to start working with your mortgage consultant early on. Mortgage consultant, Chris Johns, recommends meeting with a mortgage consultant 2-3 months before putting an offer in on a home. This would allow the majority of the paperwork to be taken care of so you don’t feel like your scrambling at the end get everything done. It is also important not to open any new credit cards or deposit any large amounts of money into your bank accounts in the middle of the process – this can prolong the approval process.
In the end, remember to listen to your mortgage consultant and your realtor and pick one you can trust. They are professionals and will help get your past the endless amounts of paperwork so you can purchase a home.