Buying a house is a major commitment. That means it’s important for you to understand the journey that you’ll be taking during the homebuying process—from start to finish. These frequently asked questions will help your quest to homeownership be more manageable.
What is the first step in the process?
Estimate the total amount you can afford to pay on your monthly mortgage. Make sure to work ongoing expenses into your budget, such as property taxes and homeowner’s insurance. Then, using the current interest rates, determine the maximum price you can pay for a house. It’s important that you include approximate closing costs and fees.
Is it necessary to get a Pre-approval Letter?
A pre-approval letter from your Mortgage Lender shows how much money you’re pre-approved to borrow. This means your financial information and credit report have been checked to prove your eligibility for a loan. It’s good to know how much you’re qualified to borrow because your down payment and other costs need to be calculated into a home price you can afford.
When can I start house hunting?
Once your pre-approval letter is available, go house hunting, make an offer, sign a purchase agreement (in person or electronically), and provide your REALTOR® with an Earnest Money Deposit. No worries, this money will be credited toward the amount required at the Closing. Remember that Earnest Money is usually required within 48 hours of your offer being accepted by the Seller.
Why is a Home Inspection needed?
You need to find out if costly repairs—that you can’t see—are needed. The inspector will provide a thorough report of areas checked such as the:
- Home’s structure
The price for an inspection depends on the size of the home.
When should a Mortgage Loan Application be completed?
As the Borrower and depending on your purchase contract, you’ll need to submit a formal mortgage loan application within five business days of your offer being accepted and an approved property inspection has been completed. You will hear from your Loan Officer if you need to provide updated financial documentation.
Be sure to check back next week for FAQs Part 2 that will walk you through the mortgage loan process.
Information is subject to change without notice. This is not a commitment to lend and all loans are subject to credit approval; certain restrictions may apply. NMLS ID #13589 (www.nmlsconsumeraccess.org). See phmc.com for additional licensing information.