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PURCHASE 101

You've found your dream home and you're ready to get things moving. You'll want to know the information that's contained in these articles. Take a few minutes to familiarize yourself with the process while you're in process.

Home Owners

Who Is Who In The Process

  • Mortgage Loan Originator: That's us! We will sit down with you and review your credit, income, assets, along with both your short-term and long-term financial goals. From there, we will tailor a mortgage program that fits your needs. We will walk you through the entire process and work closely with everyone involved.

  • Buyers Agent: This is the agent who represents you and helps you find a home. Once they know what amount you are pre-approved to purchase, they will meet with you and find out where you are looking to buy and what your wants and desires are in a home. They will compile a list of homes for sale and arrange to show them to you...even if they aren't listed with their company. You can elect not to use a Buyers Agent and negotiate directly with the Listing Agent.

  • Listing Agent: The Listing Agent represents the seller contractually and markets the home to potential buyers.

  • Inspector: This professional is hired by you to perform a full inspection of the home you which to purchase. They are professionally licensed and will give you a thorough analysis of the homes condition. This part is not required, however highly advisable. Your agent can provide you with a list of home inspectors.

  • Appraiser: This person is hired by your lender to help determine if the home meets the value and standards of the loan program.

  • Insurance Agent: Pretty self-explanatory, but you will work with his person to have your new home insured.

  • Processor: This person works for your lender and assists them with all of the duties of getting your mortgage approved and set for closing.

  • Underwriter: The Underwriter is the person who will make the final decision on you loan approval. They will review your income, credit, assets, and work history to insure everything meets the requirements.

  • Closer: The final piece of the puzzle will be closing your loan and the sale of the house. This is usually done at a title company where their closer will go over all of your closing documents and help coordinate the exchange of keys to your new home!

Who Is Who
Do's and Don'ts

Do's And Don'ts When Buying

Here are a few simple Do's and Don'ts to follow during the buying process:

  • DON'T apply for any new credit. This can impact your credit score or cause your debt to income ratio to change, possibly making you ineligible for your loan.

  • DON'T change jobs. If you are in the process of getting a new job while you are in the home buying process, please let your lender know immediately.

  • DON'T move money between accounts.

  • DO pay bills on time.

  • DO get your loan officer any requested documentation as quickly as possible.

Appraisal vs. Home Inspection

What Is An

APPRAISAL?

A home appraisal is an unbiased estimate of what a home is worth. An appraisal is used to determine whether the home's purchase price or loan amount (if being refinanced) is appropriate given the home's condition, location, and features.

 

The lender will order the appraisal while the customer pays for it. The appraiser will be a licensed and trained individual who is familiar with the local real estate market.

 

A home's appraised value is influenced by recent sales of similar properties. The number of bedrooms, bathrooms, and square footage are key factors in assessing the home's value.

The appraiser will do a complete evaluation of the interior and exterior of the property, noting any conditions that adversely affect the home's value.

The appraisal is generally completed a week after the property has been viewed by the appraiser. You will receive a copy of the appraisers report once it is completed.

What Is An

INSPECTION?

A home inspection is a report on the overall condition of a home. Unlike the home appraisal, the inspection is not required by the lender, however it is highly recommended you hire a licensed home inspector to view the property before you decide to go through with the accepted purchase agreement you have.

A thorough home inspection gives the buyer details about the home's structure, foundation, heating and plumbing, electrical, etc. A home inspector will check areas beyond what a buyer can see on the surface.

A home inspector DOES NOT inspect septic tanks, well pumps, water conditions, or interior wall spaces. If you have concerns about any of those, you can get separate inspections or tests for those items.

While you don't attend the appraiser's viewing of the property, you can and should attend the home inspection. The inspector is not a licensed appraiser and should not give you an opinion on the property's value, but will give you a written report on the home's condition.

Appraisal v Inspection
PMI

What Is PMI

What is PMI (Private Mortgage Insurance), and why may you need it?

PMI, also known as Private Mortgage Insurance, is a separate insurance policy from your home owners insurance that reimburses the lender in the event the borrower defaults on the loan and goes into foreclosure. The borrowers pays the premium, generally on a monthly basis with their mortgage payment. 

So how can you avoid having to PMI? Great question! Generally PMI is required when you put less than 20% down on your home purchase. There are loan programs that don't require PMI with a less than 20% down payment, and there are some programs that require it no matter how much you put down.

There are a variety of factors that determine the monthly amount of your PMI and how long the PMI stays on your loan. Those factors include your credit score, type of property, the amount you put down, loan program, loan term, fixed or adjustable rate, purchase or refinance, and whether it's going to be your primary residence.

Because of all these variables, we will sit down with you and go through all of your options and show you the impact both short-term and long-term.

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