Once your offer has been accepted by the seller, you are just a few steps away from becoming a homeowner. Now is the time to secure financing and work on closing escrow. These two steps are the final hurdle you will need to clear.
Here are the things to keep in mind when securing a loan for your future home:
- Begin the loan application process early
Getting pre-approved is just a preview of the actual loan application process. Actually getting a loan approved involves more steps and takes longer. After your lender has obtained the required financial documents from you, they will have the property you intend to buy appraised. If the appraised value is the same as your offered price, the rest of the underwriting process will commence. If the appraisal is too low, you will have to renegotiate with the seller, or cover the difference with extra cash.
- Decide on the loan that works for you
There are many types of mortgages to choose from. Pick the one that you are eligible for and that best suits your goals. If you are a military veteran, consider a VA loan. If you have good credit and this is your first time to buy a home, consider exploring your options in the Federal Housing Authority’s loan program.
- Be available to your lender
As you wait for the loan to be processed, your lender will contact you for further information. Make sure to provide anything they require of you in a timely manner to speed up the process. At the same time, keep an open line with your Realtor to make sure that everything is on track.
- Maintain a good credit profile
Keep track of your spending and credit. You should avoid making any big purchases that might hurt your credit score. The best thing to do is to wait until the home loan application process is complete.
Once your mortgage is approved, it is time to enter the final phase of the home-buying process. And this is the close of escrow. Simply put, closing escrow is the step wherein both sellers and buyers will officially transfer documents, funds, and so on.
During this period, buyers should keep in mind the following:
- Gather all paperwork
This includes the loan estimate, contract, proof of title search and insurance, flood certification, homeowner insurance, mortgage insurance, home appraisal, and the inspection reports and the closing disclosure.
- Conduct the walk-through inspection
Do this 24 hours before closing. This is to make sure that all previous issues have been addressed. By this point the seller should have vacated the premises and has left the property in the same condition during the sales contract. If there are problems, you can delay the closing or ask the seller to cover necessary repairs.
- Sign documents and pay closing costs
The buyer should sign the terms and conditions for the mortgage and the transfer of property ownership. All fees should also be settled at this juncture. The closing agent conducts the settlement and makes sure everything is properly signed and recorded, fees paid, and payments distributed.
- Receive closing documents
The buyer should receive the closing disclosure, the mortgage note, the mortgage or deed of trust, and the certificate of occupancy.
Once all of this is completed, congratulate yourself. You are now a proud homeowner.
Any questions about the financing or escrow process? Call me at at 760 622 5087 or contact me here today.