As a buyer, there are some advantages when you don’t rush through the home buying process. A comprehensive look at the property you’re purchasing will minimize nasty surprises later. Also, you won’t have to spend every waking moment gathering supporting documents for the loan. An average close will be around 30 days from accepted offer to recording and getting keys.
This is a basic outline of steps involved.
PRE-QUALIFICATION I’ll gather financial information from you about your assets, debt, income, credit and employment. This information determines what type of a loan you can get and how much you can borrow. Your secured monthly debt should be about 45-50% of your gross monthly income.
This is the point where you will be looking for a home with your Realtor.
PRE-APPROVAL While you’re looking for a new home, I’ll get your documentation to support the pre-qualification. If everything matches what we talked about, I can send the REALTOR a form to accompany an offer that validates your ability to qualify for a loan. After March 31, 2011, the updated version of this form is called a Pre-Qualification Form.
After you select a home & have an accepted purchase contract, you’ll inspect the home to make sure it’s in good condition or to note what you’ll want repaired before Close of Escrow. This is where your REALTOR will distinguish themselves, by working hard to make sure the property is in sound condition and meets local code. This is also when the escrow company will issue a preliminary title report, so you can make sure title to the property is clear.
PROCESSING The processor organizes everything you’ve provided into a file, double checks to make sure it’s complete, coordinates with your insurance company and submits the file to underwriting for a final loan approval once the file is complete.
Once the inspection period is successfully resolved, the appraisal is ordered to validate the purchase price is correct.
UNDERWRITING An underwriter reviews your financial information, the appraisal, the preliminary title report and issues a Clear to Close or could request more information at that point in order to get your loan to the closing department.
LOAN DOCUMENTS to TITLE CO. Loan documents are emailed to the title company. The escrow officer issues an estimated Settlement Statement (HUD-1), which is reviewed by the REALTOR, the Loan Officer and the lender closing department to make sure that all the figures are correct. Once everything is in agreement with the purchase contract terms, the estimted HUD-1 is sent to you for review.
SIGNING AT THE TITLE CO. You meet with the Escrow Officer, your Loan Officer & Realtor at the title company to sign the loan docs. You will bring a cashier’s check for the amount needed to cover your down payment and any closing costs.
CLOSE OF ESCROW This is the date specified in your contract that the purchase will record. The lender funds their loan, your funds are deposited and the title company records your purchase at the county. That’s when you’ll get your keys. This is the date you should work from if you’re planning moving vans, utilities, etc.
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