A Step-by-Step Guide to Homebuying
Whether you’re a seasoned homeowner or a first time home buyer, you will need help navigating today’s mortgage requirements. Getting a mortgage in 2016 is very different compared to the mortgage process of 10 years ago. Since the housing crisis of 2008, government regulations have placed an increased burden on lenders to verify borrower’s information and gather additional documentation. These new requirements can extend the process.
That being said, don’t let the fear of the red tape standing between you and your dream home discourage you! SCCU is your partner in homeownership, and we will work together to make the loan process from start to closing as smooth as possible, and ensure you get the right loan with a payment you can afford.
Communication is vital to keep everyone involved informed and moving forward. Your SCCU Loan processor will provide timely updates regarding the status of your loan, and we will respond to your calls and emails within one business day. There is an entire team working on your loan, and often we need to gather information from the other specialists to answer your questions, which takes time.
Please bring plenty of patience to the table! The degree of effort and documentation needed depends upon your individual circumstances, and some of the information you’re asked to supply may seem unnecessary to you, but SCCU must comply with the new laws. The quicker you respond with the necessary information, the faster we can get your mortgage closed.
Click on the steps below to expand the sections and reveal what you can expect for during each phase of your homebuying process:
Selecting Your Real Estate Agent
Most people select their agent by referral from a friend or family member or by selecting an office with a reputable name. This is certainly one way to go about it and may work just fine. However, not all agents are created equally. Here are a few tips for selecting a good realtor:
Pick an Agent That is Credit Union Friendly
Some of our members have reported being forced to use a specific lender of the real estate agent’s choosing. Members have stated the agent tells them they “must” use the specific lender in order to secure the home. This is an illegal practice and violates your rights as a home buyer. If you encounter this practice, please contact us immediately.
Check SCCU’s Watchdog Realtor Ratings
Get feedback directly from other credit union members who have utilized the real estate agent’s service.
Use Official Industry Websites Such As www.REALTOR.org
Find the real estate agent that is just right for you. With the ability to search by location, certifications, language and business specialties you will be sure to find a agent that meets your needs.
Ensure The Agent Has A User-Friendly Web-Site
This will save you a lot of time and a lot of gas. No need to drive around from house to house on your Saturday and Sunday afternoon, searching should be easily done right from your own home.
Finding Your Dream Home
Searching for just the right home is just the right time to be picky. After all, when the dust settles and the boxes are unpacked you want to be happy in the home you have selected. Here are a few tips to get you headed in the right direction.
Know Your Price Range and Stick to It
Buying a home is an emotional decision; try not to let yours get the best of you. Aim for a monthly payment you are comfortable making while maintaining your desired lifestyle. Also, going beyond the amount you have been pre-approved for may result in the need for a larger down payment.
Location, Location, Location
The right location is one of the most important factors in purchasing a home. Consider how close you will be to work, schools, shopping, recreation, highways, airports, etc. Also, become familiar with the type of neighborhood. Is there a Homeowners Association (HOA)? Are you in a flood zone? Are there future plans for development that could alter your decision?
Know the Cost of Property Taxes and Insurance
The cost of property taxes and insurance can be deal killers. These costs will be figured into your monthly payment and affordability of the home. If the home is located near water or in a flood zone you can expect a significantly higher insurance premium. The same holds true for property taxes on homes in more desirable areas or with more land. At the time of your pre-approval these costs will be estimated, but any fluctuations could have an effect on the amount you are eligible to borrow.
Making an Offer
Making an offer can be one of the most stressful steps in purchasing a home. You will want to be prepared for some back-and-forth and even the possibility of the deal falling through. To help you get the most value for your money we recommend the following.
Know the Comparables
To get the home for a fair value it is essential to know what others have paid for similar homes within a reasonable distance from the home you have your eyes on. This information should be provided to you by your real estate agent. However, it can also be found on many of the home search sites such as those we have recommended above. A good rule of thumb is to only look at sales in the last six months.
Ask for Closing Costs to Be Paid
Buyers are often successful at offering close to the asking price, but requiring the seller to pay closing costs. If successful this is one less out of pocket expense for you and a potential source of funds to make your move less stressful by hiring movers.
Ask for Contingencies
Sometimes deals fall apart and you want to ensure you are protected. Ensure your offer is contingent on obtaining financing, a satisfactory inspection and a reasonable appraisal. In the event any one of those items fails you will not be contractually obligated.
Make Sure You Are Provided Enough Time For Closing
It is not uncommon for a seller or their agent to attempt to rush the deal by requiring a closing within an unreasonable amount of time. While some loans can be processed more quickly than others, you should ask for a minimum of 60 days to close.
Be Prepared to Accept Their Counter-Offer
Many people lose homes during the offer process because they are dead-set on ‘their’ price and are unwilling to budge. Carefully consider the counteroffer, you would be surprised how little a few extra thousand dollars adds to your monthly payment. If the counter is reasonable, you can still afford it, and you absolutely love the home, don’t be afraid to go for it.
Be Prepared to Walk Away
For as many people that fall into the category above, there are just as many who may foolishly pay more than they should. If you have done your homework and your offer is fair, you have carefully reviewed the counter for reasonableness, and you still feel they are asking too much…walk away. While this may be difficult ‘in the moment’ remember there are more homes and you will find the one that is right for you.
Your Offer Was Accepted, What's Next?
If you’ve made it this far – congratulations, but the fun isn’t over yet. Not to worry, we’re here to get you through the rest.
Send us the Contract ASAP
The contract is required to begin processing your request for loan closing. The sooner we receive this, the sooner you will be calling the movers. To get the process started, call your Express Sales Associate directly or request assistance from our Mortgage Processing Department.
Watch Your Email and Sign Disclosures ASAP
Your initial disclosures will be provided via email. Be sure you look for these disclosures within 24 hours of confirmation your contract has been received. Without signed disclosures we cannot proceed.
Provide Payment for the Appraisal
Again, this will assist us in expediting your closing.
Have Your Documents Prepared
You will be required to provide more documentation than you probably care to. We will do our best to minimize this for you and make the process as convenient as possible by allowing you to upload documents online. The minimum documents you should have prepared are:
Last 2 Years of Tax Returns for All Borrowers
Last 2 Pay Stubs
Last 2 Months of Bank Statements (If you provided a list of assets we will require bank statements for those accounts. In addition, we require bank statements for the accounts holding your funds for closing costs/down payment)
Worried about any other aspects of purchasing a home that weren't covered in this article? Contact a Mortgage Professional in your area today:
Brevard: 321-752-2222, option 3
Broward: 954-704-5000, option 3
Miami-Dade: 305-882-5000, option 3
All Other Areas: 800-447-7228, option 3