By Gregg Mashack, Vice President of Mortgage Lending, Marine Credit Union
Buying your first home can be an overwhelming process if you don’t know where to start or what to expect. Following these steps will help you enjoy the process and know what to expect.
- Check Your Credit – Credit scores will range anywhere from 300 to 850. Always review your report to check for accuracy. If there are errors, you are able to dispute them. If you don’t know where to check your credit, you can go to Annualcreditreport.com. It is best to work with your mortgage lender on the credit process and let them direct you if further action needs to be taken.
- Choose a Mortgage Lender and Get Pre-Approved – When choosing a mortgage lender, make sure you work with someone you trust. Someone who will properly answer your questions and guide you through the process. Ask a friend or family member for a recommendation or start with your own financial institution. Once you have picked your lender, it is best to complete a mortgage application so you can get pre-approved. Expect to provide W2’s, paystubs, bank statements, 401k and other investment statements at a minimum. Remember, when getting pre-approved you have to afford the payment so it is best to understand your overall budget and what you can afford. This would be the best time to discuss your options for downpayment and how much to budget for closing costs.
- Choose a Realtor and Go Home Shopping! – When choosing a realtor, seek a recommendation from someone you trust or a referral from your lender. It is best to interview your realtor to make sure you feel comfortable with them and they understand your home buying needs and wants. When you go shopping, make a list of what you are looking for. Remember to keep your budget as a top priority. Shopping is the FUN part of the process, so relax and enjoy it!
- Make An Offer – Once you have found a home you like, make an offer. The offer process can be a bit overwhelming and challenging, so that is where having a great realtor and lender will come in handy. Once your offer is accepted, you will be required to put down earnest money to protect your offer until closing.
- The Mortgage Process – Once you have an accepted offer, contact your lender to start the official process. You may be required to pay for an appraisal up front but the rest of your costs and down payment will be collected at closing. Your offer will usually dictate when you close and any other stipulations. You will want to get a home inspection, which is typically not required as part of the mortgage process, but something you will want done to ensure the structure and stability of the home.
- Closing and Move In! – Once your mortgage loan is approved, you can close. Typically your closing will take place at either a title company or your lenders office. Remember, you will be bringing in your closing costs and down payment in at closing. Once you have signed all the paperwork, your dream has come true and you now own the house! Now all you have to do is move in. Don’t let that process overwhelm you too much. Ask family and friends for help. If you can afford it, hire a moving company. You did it, congrats, you are a homeowner!