26 Jul The Homebuying Process Explained
Imagine you finally secured the money for a down payment or got your credit score high enough to begin the house-hunting process. As the excitement balloons, you wonder how long you will need to wait for the completion of the whole process, which includes obtaining a home loan, finding the right house, being handed the keys, and lots in between. Predictably, you’ll have to jump through a few hoops, so-to-speak, before you can move into your home. The homebuying process can take anywhere from 30 days to over five months. A healthy expectation is about three months, give or take, from start to finish. Below, we’ve broken down the homebuying process a bit to help you navigate through the key steps.
Get Pre-approved or Pre-qualified
Though the terms pre-qualification and pre-approval are sometimes used interchangeably, the former is only the first step and will give you an idea — based solely on data you submitted to the lender — of how much of a loan you could likely secure. Pre-qualification can be done over the phone or online and usually involves no cost. Keep in mind that a pre-qualification is by no means a guaranteed loan offer.
Pre-approval, meanwhile, entails a much more detailed review of your financial background. The lender will check your credit score and independently verify the documentation pertaining to your income, debts and assets. With a pre-approval letter, you’ll receive a conditional commitment in writing for a loan amount.
Choose a Real Estate Agent
While hiring a real estate agent is not a necessity, an experienced agent generally has the tools to help you find your desirable home much faster. Not only will he or she narrow down the housing pool according to your budget and priorities, but this person will also negotiate with the seller and handle all the paperwork in an expeditious fashion. Ask friends and family members for recommendations and be sure to interview your real estate agent so you can get a better grip on his or her qualifications.
Shop for a Home
House-hunting is often the longest yet most enjoyable step in the homebuying process. With the assistance of your agent or online resources, you’ll screen houses that meet your criteria. Take time to visit every house on your radar. Once you zoom in on a property, you or your agent will put in an offer. The seller may accept or refuse your offer, and they may also submit a counteroffer of their own.
If both parties agree on an offer, you will sign a contract that includes the final purchase price and any contingencies that must be met. A common contingency is a loan contingency, which lays out the type of mortgage the buyers intend to obtain and allows for buyers to back out of the contract if they’re unable to secure a mortgage. It’s important to review a contract thoroughly. If any doubts persist, ask your agent or attorney.
Secure a Mortgage
Once you and the seller have signed a purchase agreement, an underwriter will examine all the necessary documentation in order to approve your loan application. To avoid delays, refrain from taking on new debt in the months prior to and during your application process. Once your mortgage is approved, the closing is the final step. At your closing appointment, you will pay any remaining closing costs and sign a handful of documents, such as the deed of trust or mortgage, a promissory note, and the closing disclosure. Once all papers are signed and the property is transferred, you can now officially move into your home sweet home!
At Fairway Independent Mortgage Corporation Fort Lauderdale, we’re happy to help. For additional questions and support during the homebuying process, contact one of our loan officers today!