The Homebuyer’s GuideAdvice about shopping for your home loan.
The Consumer Financial Protection Bureau of the U.S. government issues a large booklet called a Homebuyer’s Guide that lenders must give to borrowers. It thoroughly explains the process of getting and closing a mortgage on a new home, but it’s not the easiest document to read and comprehend. To help you better understand the complex processes described in the booklet, we’ve distilled the most important information below. Call Zachery Adam of Go Prime Mortgage at 831-226-1210 if you have additional questions.
The Home Buying Process
Most people think it’s important to find a home before applying for a home loan. That is how it’s been done for a long time and how the Homebuyer’s Guide outlines the process. However, we’ve learned from our years of experience that this process can put the cart before the horse. Here are 11 tips we suggest before buying a home.
1. Decide the Time is Right.
Whether this is your first home, a second home or an investment property, you need to take a look at the pros and cons and make the decision to buy.
2. Find the Right Mortgage Lender.
Talk to lenders to find one who communicates at your comfort level and can help you through the process. Your lender will then help you find the best loan for your circumstance.
3. Pre-apply for a mortgage
Or pre-qualify with Go Prime Mortgage. By taking this step earlier in the process you’ll know exactly how much house you can afford and avoid heartbreak down the line. This will also help you figure out your future budget for monthly payments and even how to save extra additional costs that come up along the way.
4. Find a real estate agent.
Find an agent who listens to what you want before showing you any houses. Make sure to tell the agent that you’ve been pre-approved (or pre-qualified) for a mortgage to give them an understanding of your budget.
5. Choose the house and negotiate the price.
When you know how much you can borrow, you can be more confident in your offer. Sellers like pre-approved buyers because they know they’re serious. If your bid is contingent on selling your current home, make sure that process is underway.
6. Apply for the mortgage loan.
When you work with a lender who is thorough in this process there shouldn’t be any surprises in this step.
7. Have the home inspected.
You want to know that everything works and there are no surprises such as mold, structural damage or insect infestation, that would jeopardize your home purchase.
8. Build Your Team.
When buying a home, you need to partner with an attorney, an escrow company, home insurance providers and other a variety of other services. If you’re paying for these services, you can make the final decision about who to hire. This is a good stage to determine your closing costs.
9. Make Your Final Walk Through.
After your loan is approved and you’ve lined up all the services, you’ll need to complete the process, walk through the house one final time. This gives you a chance to spot any outstanding problems and to begin planning your vision for the future.
10. Close on the purchase.
Closing on your new home is both exciting and nerve wracking. Be prepared to sign a lot of documents. Make sure you fully understand everything you’re signing. When it’s over, you’ll be the proud owners of a new home.
11. Move into your new home.
You may get the keys immediately or there may be a waiting period for either you or the seller to finalize other situations. In either case, be ready to move and make the home your own.
According to the Homebuyer’s Guide, finding the right mortgage is the first most important step along the way. Since it facilitates the entire process, it’s even more important than finding that perfect home. The type of mortgage you choose will affect every other action, from closing costs to your monthly payment. Work with a lender — such as an independent mortgage lender — to sort through your options to find the best match.
In most states, including California, you’ll find many types of mortgage loans to choose from. Some, like VA loans and USDA loans, don’t require down payments. Others, like renovation and FHA 203k loans, have special requirements. Once you choose the loan that works best for you, you’ll have a much better idea how much money you’ll need up-front to purchase your new home.
Don’t Forget Additional Costs
The Homebuyer’s Guide reminds you that you’ll have other costs besides your monthly mortgage payment, which includes the principal and interest. You’ll also be responsible for your real estate taxes, which can vary wildly depending on the city in California where you choose to live. Those taxes are typically included in your monthly payment.
Another cost is insurance. Some mortgage loans require that you carry mortgage insurance, which protects the lender in the event that you default on the loan. You will also need to have homeowner’s insurance, which protects your home in case of accident and other damage. Mortgage lenders require you to carry homeowner’s insurance, but you can work with your own agent.
What is the Loan Estimate or LE?
Your independent mortgage lender must provide you with a Loan Estimate within three business days of receiving your mortgage application. The LE replaces what was referred to previously as a Good Faith Estimate (GFE) and the Truth in Lending disclosure. It specifies the loan amount, the interest rate, the term of the loan, your closing cost estimate and more. Receiving an LE does not require that you do business with that lender.
Don’t feel like you need to rush into a decision. Before you start shopping around for the right property, shop around for the right mortgage lender. Hold out for the best match.
For a complete and inclusive mortgage solution, Go Prime Mortgage will be your partner with honesty, transparency and integrity. Go Prime Mortgage is the complete package when you compare our services to banks and other independent mortgage lenders. Apply Securely Online today.
Get More Information
The links below offer more information about the mortgage process. Discover why you can trust Go Prime Mortgage to finance your California home purchase.
Making the biggest investment of your life so far means it’s important to find a lender with whom you connect. Learn as much as you can about the home-buying process. As a first time homebuyer make sure you find the right house and get the right mortgage.
Go Prime Mortgage offers more mortgage types than most banks. Review the variety of mortgage loans and read their descriptions. To understand the differences call Zachery.
If you’re applying for a mortgage here’s an invaluable list of things to do or avoid during the process. Even seasoned real estate investors can use a refresher. Get good advice on the dos and don’ts of buying your first home in the Bay Area.
What do you need to apply for a loan? The answer is different for everyone. Here’s a complete list to give you an idea. While you won’t need everything on this checklist, review it to get an idea of what your independent mortgage lender will ask about. For a more specific list, send Zachery a message.
Everyone has questions about buying their first California home and applying for a mortgage loan. This page answers the most common questions people have. These frequently asked questions are a resource for you. See if your questions are answered here.
Law requires that you be provided the homebuyer’s guide when you apply for a loan. Before you dig into the massive text, here’s a helpful summary. You will get a copy; but this page summarizes what’s in that disclosure.
As you explore the rabbit hole of mortgage loans, you’ll come across terms and acronyms that you don’t know. Look here for help. You’re not expected to know all the terms and phrases. Look here first or ask any questions you may have.
Enjoy a mortgage process built for the modern world.
Borrowers can easily complete a loan application, upload supporting documentation, eSign disclosures, and monitor the status of their loan — in a single, easy-to-use location. Apply Securely Online
Find out how Zack can help you
If you have more questions about the Homebuyer’s Guide, get in touch with Zachery Adam at831-226-1210. You can also connect with him online. If you choose Zachery as your mortgage lender, he will go through the Homebuyer’s Guide with you to ensure you’re comfortable throughout the process.
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“When Zachery lived in CA, I had the pleasure of working with him on 20+ transactions over 3 years. Words that describe Zachery and the service he regularly delivered- partnership, professional, communicative, organized, transparent, and above all else integrity. Asheville NC is fortunate to have a Business Professional like Zack- you want him on your Team.”J Flaniken