What happens when buying a house?

Our “First-Time Homebuyers” series continues this week with another entry from Dave Chmiel of Ruoff Home Mortgage.

Last time I talked about getting pre-approved for a mortgage. This time I’d like to let you know what happens when buying a house!

So, you got pre-approved, found the right realtor to work with who found you your dream home. You made your offer and it was accepted by the sellers, you are now on your way to home ownership! So, what happens now?

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At this point your lender will need a copy of the completed purchase agreement. The purchase agreement will have most of the information needed to set up your official mortgage application, like sale price, seller paid closing costs and closing date to name a few.   

Once the application is completed, it is now time to sign! Make sure that you get a good review of the loan estimate before you start signing. The loan estimate shows you the type of loan you are applying for, the monthly payment, the estimated cash that you will need to close and that is just the first page! Page two will itemize the costs and page three is loaded with information too!

Don’t be intimidated by the stack of documents that you will be signing, they all have a purpose and most are disclosures designed for consumer protection.

Now that the loan documents are signed, your lender will submit these into the “pipeline” where a case opener and processor will get everything for the underwriter. Once everything is in order, the underwriter will review the application for approval. During this time you will need to shop for your homeowners insurance, you will more than likely get an inspection done on your new home and your lender will order the appraisal.  

In about a week, give or take a couple of days, the underwriter will issue and approval with conditions. It is hard to turn in a complete application the first time, so conditions are the last few items that the underwriter needs to approve your loan. You will work with you lender to collect these and once these are all rounded up, it’s back to underwriter for everyone’s favorite words, “clear to close”!

Once the “clear to close” is issued, you will schedule your closing and work will begin on the final Closing Disclosure.  The Closing Disclosure looks a little bit like the loan estimate that you saw in the beginning with more detail. Also, the loan estimate was “best guesses” on somethings, the closing disclosure will be the actual costs. Once you view the closing disclosure, there is a mandatory three day waiting period before you can sit at the closing table.

You have approved the closing disclosure, now it’s time to get ready to go to the title company to sign more papers.  There will be some new documents, and you will sign some that you signed before. The closer at the title company will go over everything that you are signing and if you have a question, ask! You may also request the closing documents a day early if you wish to read everything.

If you are needing to bring money to closing you will need to know what an acceptable mode of payment is.  If you are bringing less than $500, you may write a personal check. Amounts between $500 and $9,999 you will be required to get a cashier’s check from your bank and any amount over $10,000 will need to be wired. If wiring funds be careful and make sure that you get the instructions from the title company.

Congratulations, you are now a homeowner!   

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Dave Chmiel

Author: Dave Chmiel

Senior Loan Officer at Ruoff Home Mortgage

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