What happens when buying a house?
Mar18

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? 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...

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Five Smart Money Moves for First-Time Homebuyers
Feb10

Five Smart Money Moves for First-Time Homebuyers

This is the first in a series of posts for first-time homebuyers from Living Fort Wayne. So you’ve decided to take the plunge into the world of homeownership.  Congrats!  Purchasing a home is likely one of the biggest financial investments you will make in your lifetime, and it makes sense to do a little homework to make the process easier.  In my 13 years as a financial planner, I have worked with many clients to help them transition from renting to owning their home. Here are five things to do before you start looking at houses. 1 – Check your credit Your credit score will be one of the most important factors when you want to qualify for a mortgage loan. It not only affects your ability to get the loan, but your score has an effect on the overall cost as well.  In other words, the better your score, the lower your interest rate.  To get a sense of where you stand, you can go to annualcreditreport.com to get a free copy of your credit report from all three of the major credit bureaus (Experian, Equifax, and TransUnion).  Check for errors and file a dispute if there are any items on the report that are inaccurate. Just because you pay your bills on time does not mean you will have a great credit score.  Other factors like the amount of debt you have relative to your available credit limits and the age of your oldest open credit line will factor into your score as well.  Either way, you will need to have a score above 720 in order to get the best rates.  If you have any negative items, don’t worry!  You may still be able to qualify, but at a slightly higher interest rate.  Check with a mortgage officer to get the details.  They should be able to pull your actual credit score and let you know if there are any glaring issues that will prevent you from getting a mortgage.  You can also check for apps like Credit Karma that give you an estimate of your credit score, but be wary of entering sensitive information anywhere online and never enter your credit card info.  You should be able to get a score without paying for it, but there is no shortage of online vendors that will try to charge you or sign you up for some type of credit monitoring service in order to get your credit score. 2 – Evaluate your cash flow Before you get on the hook for tens or maybe hundreds of thousands of dollars, you should evaluate your income and liabilities...

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