When buying a home there are many important factors. The first and probably most important is to find a
lender that you feel comfortable with and that will be highly competitive in obtaining the lowest possible interest rate. Have your loan officer
pre-qualify you, so you know where you stand before you even view homes. You don't want to go looking for a home before the pre-qualificaton, you might see a home you like and get excited about it, and then not be able to qualify, or you might wind-up purchasing a home that is less than you can afford.
The next step after you have picked out that perfect home is to have your agent consult and help in determining the mortgage that fits you. If by chance, you are a first time buyer, there are several different mortgages that offer lower interest rates and help assist you with closing costs. Which means less out of pocket money for you. There are many different mortgages that may require less than a normal down payment. Some sellers may entertain owner financing. This type of purchasing normally requires no appraisal, survey, and minimal closing costs.
When you have figured out which mortgage is best for you, it is now time to negotiate a contract between you and the sellers of the property you have chosen. Once you and the seller agree to all conditions of the contract, escrow will start. Depending on the mortgage, it may take 4 to 6 weeks before closing. During this period an appraisal will be performed. This is required by the lender to determine the value of the property. If the appraisal determines the value of the home to be less than the purchase price agreed to on the contract, you can do one of two of these options. Either, renegotiate with the seller, pay the amount over appraisal, or not consummate the contract (walk away with no penalty). If the appraisal comes in higher, say the purchase price is $80,000 and the appraisal comes in at $85,000, the seller is still obligated to close at the contracted price. This assures that you are not over paying for the home.
While all this is taking place, the lender will have to verify the information on your application, such as income, employment, accounts, and if applicable, your VA eligibility. A title company will be chosen for the closing. They will prepare an owners title policy. The owners title policy assures you, as the buyer, that you have clear title to the property and there are no bad liens or claims on the property. This is like an insurance for your title or deed. If anybody were to make a claim, the title company is responsible to satisfy it. Finally, once these things have been completed, you now can go to closing.
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