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Buyer Financing Process

Your First Step to Becoming a Homeowner!
Here’s a brief and easy way to understand the financial steps you’ll need to take to guide you towards your new home.

  1. Calculate your budget
  2. Apply for a mortgage/paperwork/loan application
  3. Lender begins processing application
  4. Lender provides booklet of estimated closing and related costs. Please make sure you ask the lender if you need to have the seller pay any of Your closing costs
  5. Lending institution requests a credit report and verification of employment and assets
  6. Estimate of your loan in form or initial Truth in Lending Disclosure Statement
  7. Lender evaluates and approves the loan
  8. Your Home Search can BEGIN NOW!
  9. Find the house you want
  10. Submit an offer
  11. Loan is processed, and prior to closing, your loan will go through the “underwriting” process
  12. Lender disburses funds and instructions to closing agent/title company
  13. Sign closing documents, and once your loan has funded, the house is YOURS!
  14. Appropriate documents recorded at county recorders office
How Much can you afford?
Before you can begin a search for a new home, you need to determine your budget and estimate how much you can afford. One of the most important factors in figuring out your financial budget is getting pre-approved for a mortgage. Pre-approval uses basic information as well as electronic credit reporting to determine whether a lender will loan you the money. If you are pre-approved for a mortgage, the lender had given you a commitment to support your new purchase.
Once you have been pre-approved, you need to decide which type of mortgage to get. This decision is usually based on the interest rate of the loan and how much time you are given to pay the lender back. There are several different loan programs and you’ll need to discuss with your lender which program(s) you qualify for. Some of the common loan programs consist of Conventional financing, FHA financing, and VA financing.
 When you apply for a mortgage, you will need to furnish information regarding your income, expenses, and obligations.  To save time, have the following items available for each borrower:
  1. Two most recent pay stubs
  2. W-2’s for the last two years
  3. Federal tax returns for the last two years
  4. Last two month’s bank statements
***Please send any Lender requested information or documentation to your Lender A.S.A.P. to ensure closing on time***
Calculating Your Budget
To estimate your budget, add up your total financial worth and then subtract all the costs included in the purchase.
Here are SOME of the expenses you will carry:
Down Payment: 

Most homeowners contribute a down payment on his or her new property.  The down payment is a percentage of the purchase price that the buyer pays in full   before closing.  The larger the down payment, the smaller your mortgage will be.

 Cost:

There are quite a few costs when you’re buying a new property and it’s important to factor them into your budget.

Here are some examples:
 Monthly costs: 
The calculation of your entire monthly costs including the mortgage, insurance, taxes, etc.
Points: 
Borrowers have the opportunity to reduce the interest rate on their mortgage by paying points at the beginning of the loan.  One point is one percent of the new loan.
Final Budget:
Now you are ready to calculate your final budget. Remember to include all of your available monies, monthly salary, and additional income. Then subtract the down payment, monthly mortgage payment, closing costs, and any additional expenditure’s you might accrue. When you have arrived at your estimated budget, and are pre-approved with your lender of choice, you are ready to begin the search for your new house!

Pam Harris

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