Here are some of the first steps on what to do when you are ready to purchase your First Home... I will go into detail in a different post.
The first thing you want to do is find out how much you'll be able to afford so you can have a price range in mind. You need to talk to a Mortgage Lender first, the most common mistake people make is they think, well, I want to buy a house, I'll call a Realtor... Well, that is not the best first step. If you have a good realtor, most likely he or she will send you to get pre-qualified or pre-approved for a mortgage. Really, nobody wants to be wasting time. You don't want to go see a home that you might not be able to afford or he doesn't want to be showing you houses, taking you around town when you are really not sure if you are going to buy anything soon.
Choosing your Mortgage Lender; You want to look at your local bank first, people are afraid to go their own bank sometimes because they think the process is too long or they simply don't know that they do offer mortgages. Ask, most Banks and Credit Unions now offer Mortgage loans. Some banks offer no fees, (not all of them, and you have to keep in mind that there is no such thing as free lunch either, they will charge you somehow, either in the interest rate or application fee). Other banks offer concessions, maybe if you have a checking and savings account they do offer you a discount. If you have direct withdrawal you might also get a discount. It will all depend on the institution. It does not hurt to ask. Keep in mind not all institutions offer these benefits. You can also ask friends and family and see where they have gotten their mortgage loan from, they are your best chance if you are unsure on where to get a mortgage loan from. Talk to the loan officer, if she or he was able to explain the types of loans, downpayment, loan fees, the process, time frames, you have to go to a meeting with lots of questions. Loan Officers like that, you need to ask, so don't be afraid to bring a notebook with questions if you need to. Ask about rates, monthly payment... how much will you be qualified for? Now, don't make the mistake a lot of people do. Don't get into too much. Nobody else than you knows how much you really can afford. If you know you can only do $1000.00 a month, and your loan officer tells you, you qualify for a payment for up to $1500.00 don't go for it... you have to consider that your mortgage payment is only one of the many new payments you will have, specially if you are not used to paying utilities, maintenance and such. So be honest with yourself and be wise. Don't over do it. That's the main reason why there are so many foreclosures in the United States at the moment.
Now, you are ready to go house shopping.. This will be a very fun time but could be really stressful and at the same time discouraging. Specially if you are looking at houses weeks after weeks and you can't find anything you like! Yes! Hire an agent... he or she will be your best friend for the next few weeks or months... It will have to be somebody you will be comfortable with so choose wisely, again, ask advise from your friends, relatives or co-workers. If all fails look in the real estate book and call an agent. This agent can usually show you any house that is available for sale through a Real Estate Agency. Depending on the State you live, You do not have to pay your agent unless you are selling a home or they tell you they charge for their services, they usually get paid once they sell the home and they do get a percentage from the sale. Tell them how much money you are pre-approved for and whom you are working with as a lending institution. It is your choice on how much you want them involved in the loan process, basically both the Lender and the Real Estate Agent work for you, they are both working to get you in your house as fast and easy as possible. The agent will be the contact in between you and the selling agent. It is best if you don't have the same agent working for both buyer and seller, it is kind of a conflict of interest and really as much as you can you want to try to avoid that.
Once you have found a house go back to your lender and give them or have your realtor send them the purchase and sale agreement. This will get started with the loan process. This process depending on the institution will take between 30 - 60 days. Don't fret, this is just normal for these times. Be prepared to be asked for a LOT of paperwork. You will wonder, why do they need that? Well, you have to remember, in times like this, Banks have gotten really tight and have more and more guidelines and things change basically daily, so don't be surprised if they ask you: Where did that $25.00 deposit come from? Really, it has happened. True Story in times like these. Try to give your lender all the information they request in a very timely manner and if you have questions ask them, but usually there is a big reason for them to ask for a certain document. Will explain the Loan process in a different Post.
When the loan is approved, and closing documents are sent to Escrow. You will go sign your final loan documents. These will be: the lender disclosures, the Note and Deed of Trust and some closing and state disclosures. You will most likely not get your keys that day. Again, depending on the State you are in. Usually you will get keys to the house the day that your money is wired to Escrow and Loan is Funded and Deed of Trust Recorded.
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