1. Give us a call.
Your homebuying journey shouldn’t start with looking for a house. It should start with calling the Platinum team. Mortgages are long-term relationships, and you’ll want to be confident that your mortgage provider offers a strong combination of quality service and competitive pricing.
Pay attention to closing costs and fees in addition to interest rates — they can contribute to a higher overall loan cost. Familiarize yourself early in the process about what costs could be applied to your loan. This is where Platinum Mortgage Solutions can help.
2. Get prequalified.
Getting a preapproval could help you save time later in the process. Plus, you’ll be in a stronger position to make a credible offer to a seller.
A preapproval gives you an idea of the amount you may be able to borrow for a home loan. To determine how much you qualify for, the lender may look at your credit score, income and debts. This helps them evaluate your ability to afford a mortgage payment, including property taxes and insurance. The process may also help identify any potential problems with your credit, so you can start working on them.
If you’re preapproved, you’ll receive a preapproval letter to help with your home search and present offers to sellers. Use this to help keep your home search within budget and to present offers to sellers.
3. Make an offer.
Once you’ve found a property you like and can afford, make an offer. Be sure to research the selling prices of comparable homes in the area, so you understand the seller’s asking price. Also, determine how motivated the seller is to part with the home. Has the house been on the market for a long time — say, more than 90 days? Has the seller been coming down in price?
Your real estate agent can prepare a comparative market analysis to determine a fair offer. Their experience also comes in handy during the negotiation process.
If the buyer accepts your offer, a purchase contract will be created. This formalizes both parties’ intention to go through with the deal. Send a copy to your lender, who can guide you through the loan application process.
4. Finalize the loan.
To move forward in the mortgage process, the lender will formally evaluate your information through a process called underwriting. The goal is to assess your ability to repay the money you borrow. This means reviewing your credit score, income, assets, and past and current debts.
This process isn’t just about whether the lender will give you a mortgage. It also determines how much you can borrow and the interest rate.
During this phase, the lender will require you to submit documents. What you’re asked for can vary based on the type of loan you’re applying for and your lender’s underwriting requirements. These documents may include things like:
- Pay stubs for the past 30 days.
- W-2 forms for the past two years.
- Details about long-term debts, such as auto and student loans.
- Recent statements from all your bank accounts.
- The previous year’s tax return or the past two years if you’re self-employed.
- Proof of any other income you receive.
- Proof of homeowner’s insurance.
There may be situations where the lender needs more information after their initial review of your documents. To keep things moving, be ready to respond to these requests quickly, as they’re required for you to get a final loan decision. These items may include:
- Additional documentation to prove your income.
- Documents specific to certain situations, such as a divorce decree, letters of explanation or childcare expense records.
- Documentation on the source of your down payment funds.
- Proof you have enough money saved to cover your first few mortgage payments.
The lender will also order a professional appraisal of the property and review prices of recently sold homes in the area. This helps make sure the sale price of the home is close to its true value. The lender will also request a search and review of the title to the property. They do this to ensure there aren’t any issues with the title that may affect your purchase.
5. Do a final walk-through.
Within 24 hours before closing, arrange one final walk-through of the home you’re purchasing. You’ll want to make sure there’s no damage or other changes in its condition. This includes the removal of fixtures or other items you understood were part of the sale price.
If issues arise, your agent should remedy the situation with the seller and determine if it’ll impact your closing. If the problems will affect your closing date, be sure to notify your lender.
6. Close on your home.
Closing is the last stage in both the mortgage and homebuying processes. It’s a paperwork-intensive meeting that completes the legal transfer of the home from the seller to you. It also finalizes your mortgage documents if you’re financing the purchase.
It often happens at the office of a nearby title company, escrow agent or attorney. It’s a meeting of the buyer, seller and other professionals involved in the transaction. Keep in mind that each state has a different process for closing. This includes whether buyer and seller meet together or apart.
Typical attendees include yourself, your real estate agent, the seller and a closing agent. Some buyers and sellers may also bring their personal attorney. If you’re purchasing the home with your spouse or someone else, both of you — or an approved power of attorney — will need to attend.
At closing, you’re required to pay closing costs and down payment. You can do this with a certified check or a wire transfer. Be sure to confirm with your lender or title company the final amount before requesting either from your bank.
Closing costs can vary, depending on the type of loan you choose, location, and property type. They typically range from 2% to 5% of the loan amount and may include some combination of these fees and payments:
- Appraisal fee: It’s paid to the appraisal company to confirm the fair market value of the home.
- Attorney fees: It’s paid to an attorney to review the closing documents.
- Escrow deposit for property taxes and mortgage insurance: It’s money set aside to pay taxes and insurance payments. If you use an escrow account, you’ll usually need to pay two months of property tax and mortgage insurance payments to get started. The actual amount can vary based on the time of year and when your next scheduled payment is due.
- Lender fees: These are the origination fee and discount points paid to the lender.
- Prepaid interest: It will accrue between closing and the date of your first mortgage payment.
- Other fees: These can include credit report fees, required inspections, survey costs, title search, and title insurance policy.