Step One: Get a Mortgage Pre-Approval
Before you begin shopping for a home, you’ll want to get pre-approved for a mortgage. Having a pre-approval letter shows sellers that you’re serious about buying a home when it’s time to make an offer.
On your first call with Homestead Financial, we will tell you the loan amount you’re pre-qualified to spend on a new home. We’ll take into consideration things like your annual income, your credit score, and the down payment amount you have saved. Even if you don’t have a 20 percent down payment for a conventional loan, there are loan options you can qualify for!
Step Two: Begin Working with a Real Estate Agent & Get to Shopping!
A real estate agent specializes in helping you find the right house for your lifestyle. They are experts in the housing market in your area, and can help you narrow down your search to specific neighborhoods and housing types based on your pre-approval.
To find a great real estate agent, ask your family, friends, or coworkers for their recommendations. Word-of-mouth can help you find the right agent for you. You’ll want to find an agent you like working with so they can fully represent you in the home-buying process. We do not recommend working with the same real estate agent representing the seller of a house you’re interested in.
Once you’ve secured a real estate agent, they will probably begin sending you daily emails with the latest house listings. You’ll review the listings and let them know which houses you’d like to see in person. Keep in mind your budget and your list of priorities as you shop around for a new home. Decide the home features you can compromise on and which you must have, and stick to it as you shop around. Remember that the one thing you cannot change about a home is its location. Once you find a house you love, it’s time to move to the next step in the process.
Step Three: Make an Offer On a Home
If you’ve found a home you love, you’ll let your agent know you’re ready to make an offer. Your real estate agent can help you determine the best offer to make on the home, based on the list price, condition of the home, how long it’s been listed for sale, and the current market conditions. If it’s a buyer’s market – one where there are lots of houses available – you might get a better deal on the home than if it’s a seller’s market – one where there are few houses for sale, but lots of shoppers.
Your offer should include the amount of money you’re offering for the home, as well as any additional conditions of the offer, such as the appliances or other items you’d like to include in the sale, and contingencies like a home inspection. You’ll also want to include the closing date.
The seller will accept your offer, turn down your offer, or counter your offer with a deal they like better. If your offer is accepted, or you accept the counter offer, then congratulations! You’re on your way to home ownership!
Step Four: Finish Your Application with Homestead Financial
With an accepted offer, you can now complete your full loan application. You should move fast, as you have only a short window of time once the contract is signed.
- A copy of the signed contract
- Current pay stubs
- W-2s from all employers for the past two years (or 1099s if you’re self-employed)
- ID, such as a driver’s license
- Federal tax returns for the past two years
- Bank statements for the past two months
- Retirement account statements
Now is the time to ask lots of questions about the loan process, your mortgage, and more. Make a list of questions you think of as you go, and ask your dedicated loan professional at Homestead Financial.
Step Five: Get a Home Inspection and an Appraisal
As Homestead Financial works to process and approve your loan application, you’ll need to schedule a home inspection to check on the condition and soundness of your new home.
Professional home inspectors are unaffiliated with the home seller or mortgage lender and check over all facets of the home:
- Visible Structure: Foundation, framing, floor joists, rafters, etc.
- Electrical Systems: Breaker or fuse boxes, outlets, light switches, wiring, etc.
- Plumbing Systems: Bathroom and kitchen pipes, water supply, drains, etc.
- Roof: Shingles and structure
- Overall home condition
Your home inspector will go through the entire home – all visible areas of it – and make notes of areas that need improvements or maintenance. You will receive a copy of the final report and can use it to ask the seller to make repairs prior to closing on the home.
After you’ve negotiated any repairs with the seller, it’s time for an appraisal. Homestead Financial will set up the appraisal for you and will send our appraiser to the home to determine your home’s value. An appraiser takes into the condition of the home, its finishes, and comparable homes that recently sold in the area. In general, the appraisal should not be less than the purchase price of the home; if it is, you may need to finance the difference out of pocket, renegotiate the purchase price, or cancel the transaction altogether. Your lender and your real estate agent can help you determine how to proceed.
Once these steps are completed, Homestead Financial will finish processing your loan. When your loan gets to the underwriting department, you should be prepared to answer clarifying questions. It behooves you to answer these questions quickly to keep your loan moving forward.
Step Six: Close on Your Home Loan
When your loan is processed and fully approved, you’ll need to sign documents to complete the sale. Your real estate agent, the seller’s agent, the mortgage company, and the title company will coordinate your date of closing.
Closing typically takes place at a title company, but it also can happen at your real estate lawyer’s office. At closing, the seller will receive their money, and you receive the keys to your new home. You’ll need to make sure you bring a certified check to closing to pay your down payment and other prepaids.
Contact Homestead Financial to Start Your Pre-Approval
If you’re ready to get started in the home-buying process in Kansas City, MO or St. Louis, MO, contact a mortgage expert at Homestead Financial! We’ll help determine the type of loan you’re qualified for and get you started down the path to home ownership.