Because of the uncertainty, it is important that you make no dramatic changes in your life in anticipation of closing your loan, such as giving notice at your current residence, purchasing a new car, or changing jobs without consulting your lender. These actions may affect your loan approval or may leave you without a place to live if your closing is delayed. Making application does not guarantee that your loan will be approved.
STEP ONE: Prequalification
Before you take that first step towards home ownership and select the house you want to buy, you should contact a quality lender that you feel comfortable with. These lenders can prequalify you free of charge or for a minimal credit report fee. Prequalification will allow the lender to review your credit history, income and liabilities, and then give you an idea of the home price range you can afford.
STEP TWO: Sales Contract
Once you have been prequalified, you will have a good idea of the home price range you can afford. Now you can look for your new home. This of course is where your Benefield Realty Agent can help you (at no charge). Once you have selected a home that appeals to you, and is in the qualifying price range, you will enter into an agreement with the seller of the home. This agreement is your sales contract, and you will need it to officially apply for your loan.
You may want to have a home inspector examine the house you plan to buy. This top-to-bottom inspection will give you important information about the condition of your future home. Benefield Realty contracts automatically make a provision for this if you wish to use an inspector. We can also give you some quality recommendations, if needed.
STEP THREE: Costs
There are costs associated with the loan application process. Some costs are refundable and some are not. These costs are typical for all home buyers. Generally, most lenders charge a non-refundable application fee of $300 to $500, which covers your credit report and the appraisal of the home.
You will also commit "earnest money" when you sign the sales contract for your house. The
STEP FOUR: Documentation
In addition to completing a loan application, you should expect to provide your loan officer with the following:
**An original copy of the sales contract.
**Your bank account numbers and address of bank.
**The most recent bank statement for each of your accounts.
**Three years federal income tax returns.
**Pay stubs, W-2 forms, or other proof of employment and salary.
**Personal debt information, including loan and credit card numbers, and names and addresses of all your creditors (car loans, credit cards, student loans, retail charge accounts).
**Evidence of your rent payments, such as canceled checks or money order receipts.
**The name(s), address(es) and telephone number(s) of your landlord(s) for the past three years.
**Divorce decree(if applicable).
**Evidence of the source of your down payment money.
STEP FIVE: Application process
The next step requires that you schedule a loan interview with your lender. Your lender will take your loan application and process it, as well as underwrite and close your loan. Your lender is your best source for discussing what type of loan program is best for you. You have choices of FHA, VA, Conventional, fixed rate, adjustable rate, interest only, down payment assistance, 30 year, 15 year, and much more. Don't be afraid to ask questions here. Your lender should keep you apprised of the status of the application throughout the loan process, and will let you know if additional documentation is needed. Your prompt attention to providing what is needed will help insure a smooth process.
STEP SIX: Closing
Loan closing is the final step. It is also one of the most unpredictable parts! The end of the month is the most popular time to schedule loan closings. Crowded schedules can contribute to last minute postponements.
Loan closings are delayed for many reasons. You should be prepared to change your plans if your lender must reschedule your closing.
Rescheduling a loan closing may result in added expenses. If your loan closing is delayed, ask your lender what, if any, additional funds you will be expected to bring to the rescheduled closing.
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