Getting Ready to Buy

The home buying process can be fun and exciting! It can also be a little stressful, especially if you aren’t as prepared as you’d like to be. There are a series of steps you can take to learn more and feel in better control of the process.

1. Order Our First Time Home Buyer Guide – You can order this helpful 27 page guide on our website, or by calling 651-203-8345.

2. Attend One Of Our First Time Home Buyer’s Classes - Our classes are held at various locations around the metro area. This class takes about an hour and is an overview of the home buying process. It’s a fun and informal atmosphere where you can get your questions answered. Personal classes are also available to fit your schedule.

3. Complete A Comprehensive Budget – A detailed budgeting worksheet is included in our First Time Home Buyer’s Guide. It’s important to determine how much house payment you will be comfortable with. The payment you can qualify for and the payment you are comfortable making could be very different.

4. Organize Your Documents - Providing your W2s for the previous 2 years, your most recent paystubs covering 30 days and your most recent bank/asset statements, all pages, will ensure a more accurate preapproval but they are not required.

5. Find Out What Your Credit Scores Are - This can be done by scheduling a personal meeting with us. You may have mistakes or things you’ve long forgotten about that are still on your report and can hinder you from obtaining the best rate or program. We will be happy to help you with tips and strategies to maximize your scores. Please keep in mind the scores used to determine your mortgage qualifying may not be the same as the scores you’ve obtained through TV or internet advertisements.

6. Align Yourself With A Full Time, Professional And Experienced Real Estate Agent - Personal recommendations are the best way to find someone you can trust to represent you. We’d be happy to recommend some reliable real estate professionals for you to interview.

Top 10 Mortgage Questions

1. How much down payment will I need?
   Many things can affect how much you put down on a home and every program has different requirements that can change from time to time. The best thing to do is schedule an appointment to review your specific circumstances.

2. What do lenders consider for loan approval?
   A combination of factors go into each mortgage approval. There are basically 4 things that weigh heavily on approval. They are your debt to income ratio, your credit profile, your assets, and the property you are purchasing.

3. What is the difference between pre-qualifying and pre-approval?
   Pre-qualifying is usually a verbal conversation about your qualifications giving you an idea or range of payment you might qualify for. This can be helpful, but much too simple to start shopping for a home. Before you start to look at homes, it’s advisable to go through the entire pre-approval process. This involves reviewing your documentation detailing income, assets, debt and credit. The pre-approval is an automated process and is subject to final review of all documentation along with the property info on the home you choose. It’s very important we use accurate figures. Most sellers and real estate agents will not consider an offer without this process being completed.

4. How will past credit problems affect my ability to get a mortgage?
   It depends on the problems, how much time has passed, and if you have established additional good current credit. There are many factors that go into composing a credit score. The best thing to do is start early and schedule an appointment to determine your current credit profile and what can be done to maximize your scores.

5. Who pays my realtor?
   The seller of the home typically pays the real estate commission for the buyer’s agent, which is great for the buyer!

6. What closing costs will I have to pay?
   It will depend on the program you choose and how you have written your purchase agreement. Sellers are often asked to pay closing costs on the buyer’s behalf.

7. What is the difference between an appraisal and a home inspection?
   To put it simply, a home inspection is a detailed report of the physical condition of the home and is highly recommended, but not required. An appraisal is required and is more focused on the value of the home. There are some items related to the condition of the home the appraiser may call as a “work order”.

8. How much money will I need during the process and when will I need it?
   The first check will be for earnest money when you write your purchase agreement. Amounts vary but $1,000.00 is pretty common. If you are having a home inspection you will pay the inspector directly 3 – 5 days after your purchase agreement is accepted. Once the inspection is cleared, you will pay for the appraisal. The earnest money and appraisal fee will be credited back to you at closing towards your down payment. All remaining funds due will be collected at closing.

9. What does “locking in my rate” mean?
   If you are refinancing or purchasing a particular property, you can “lock in” your rate once a property address and closing date has been determined. You know exactly what your rate will be, assuming you close on time. If rates go up before the closing you are protected, if they come down you cannot get a lower rate. You will sign a legally binding contract to guarantee the rate for a specific amount of time when you lock in.

10. Who sets up my homeowner’s insurance?
    It is up to you to select your source for home insurance. Once your purchase agreement is accepted, you can start shopping around for insurance. Make sure to ask if there are discounts for purchasing both car and home insurance with the same agency. Your deductible should not exceed $1,000.00. Once you decide where you will be buying your insurance we will need their contact information to get what we need to complete your loan. If the seller is paying your insurance we can do that at closing.