After months of searching, you've finally found the perfect house - your dream home! It's just what you were looking for and within your budget. So, what's the next step? There's a lot to do before you can move in, and it can be a little overwhelming. Don't worry; we're here to help. This post will walk you through buying a house and give you some tips for making it as smooth as possible. So, please sit down, relax, and let's get started!
What to Do after Your Offer Is Accepted
You've found a house and made an offer that the seller has accepted - congratulations! This is a huge milestone, but there's still a lot of work to do before calling this house your home. Here's what you need to know about the next steps in the home-buying process.
First things first, you need to get a ratified contract. This legally binding document outlines the purchase price, contingencies, and the timeline for sale. Before putting your signature on the dotted line, make sure you're happy with all the terms stated, as they cannot be changed. After the contract is signed, your agent will submit it to the lender.
1. Plan a Home Inspection
The lender will then order a home appraisal to ensure that the house is worth at least the purchase price. Hire a professional inspector to check for any significant problems. Your agent will help you negotiate any repairs that need to be made after the home inspection, and they'll help handle all the paperwork involved in buying a house.
2. Stay on Top of Emails and Calls
You'll also need to stay on top of emails and calls from your agent and lender. They'll need some information from you to move forward with the sale. Be aware of any changes that occur during the process. The loan process can be fluid, and things may change along the way. Your agent and lender will keep you updated on any new developments, but it's always good to be in the loop and know what's going on.
3. Gather the Required Documents
You should start collecting documents that you'll need to sign and any other documents the lender will need. These include your most recent tax returns, driver's license, pay stubs, and bank statements. They may ask for additional documentation if you're self-employed, such as profit and loss statements. The last thing you want is to get to the closing table and find out there's a problem with your loan because you didn't submit the proper documentation.
4. Obtain a Lender's Pre-approval for a Mortgage
If you're not already pre-qualified or pre-approved for a mortgage, now is the time to do that. You'll need to provide your lender with information about your income, debts, and assets. Once your lender has everything they need, they'll begin the process of approving your loan.
Depending on the lender, this can take a few days or a few weeks. Once you've found the right mortgage, you'll need to lock in a rate. This is usually done by paying a fee called points. The number of points you pay will depend on the interest rate. You'll also need to put down earnest money, a deposit that will show the seller you're serious about buying the house. The earnest money is usually around 1% of the purchase price.
Once your mortgage is approved, you'll need to get homeowner's insurance. Your lender will likely require you to have this in place before closing on the house.
Summary, Tips, and Terminologies
Here's a quick rundown of what to expect in the whole process.
- Earnest money: This is a deposit that shows you're serious about buying the home. It's typically 1-2% of the purchase price and is held in escrow until closing.
- Locking in a rate: Once you have an accepted offer, you'll want to lock in an interest rate for your mortgage. This protects you from fluctuations in the market and gives you a set monthly payment amount.
- Disclosures: The seller will provide certain disclosures about the property, including any known defects or problems, lead-based paint disclosure, and natural hazard disclosure. Be sure to read these carefully!
- Contract breakdown: Your real estate agent will help you understand the purchase contract, which outlines all the sale details.
- Communication with lender and agent: Once everything is in place, it's essential to keep communication open with your lender and agent. This will help ensure a smooth process and avoid any last-minute surprises.
After all of that, you'll need to wait for closing day! By following these steps, you can be sure that you're on track to closing on your new home successfully. You'll sign a bunch of documents at the closing table, including the mortgage loan documents, so make sure you understand everything before you sign. You'll also hand over a check for the down payment and any other closing costs at closing. When the sale is finalized, you officially become the homeowner. Then, the keys to your new home will be yours!
If you have any questions about what documents you'll need or what else you should be doing to get ready for your home purchase, consult with a qualified mortgage professional. At First Savings Mortgage, we're here to help you every step of the way! Give us a call today. We look forward to helping you find the perfect mortgage for your new home.