If you're a first time home buyer, you know how confusing financing a home can be. So if you aren't writing a personal check for your home, you'll have to get a mortgage. Not everyone can qualify for a mortgage, so be sure you work with a mortgage lender or financial adviser before you start looking for a new home. These are the basic steps in the process of getting a home loan. If you have questions about buying a property in Reno or Northern Nevada, please contact us.
1. Shop for a Lender. Definitely start working with a lender before you start looking at homes. You'll want the best interest rate on your loan and you need to know the amount you will qualify for before you fall in love with a home you can't get a loan for. Lenders will also be able to give you an idea of your monthly mortgage payment in specific price ranges.
2. Get a Mortgage Pre-Approval. After choosing your lender, you'll want to be pre-approved for a specific loan amount. The pre-approval will require financial documents, including tax returns, current pay stubs, proof of funds for the down payment, and a look into your payment history. The benefit of being pre-approved is that when you submit your offer on a home, you can prove to the sellers you will be able to afford the home, making your offer stronger. Note- do not confuse pre-approval with pre-qualification. Pre-qualification is a very basic process that doesn't mean anything to the sellers.
3. Make the Offer (and the Sellers Accept). Work with your Realtor to determine what the best offer will be. Go too low and you risk offending the sellers or having your offer beaten out by another buyer. Go too high and you risk paying too much for the home.
4. Loan Approval. Even with the pre-approval, you'll have to provide more information to your lender to get the loan approved. Your lender should have provided you with a list of things they would need when you got your pre-approval. Remember, they're there to help you get a loan. Take their advice seriously and read our list of things you can to make sure your home loan is approved.
4. Get the Appraisal. Most lenders will require an appraisal to make sure the home you're purchasing is worth what you're committing to pay for it. Generally, appraisals come in very close to the sales price. But if the appraisal is lower than the sales price, the buyer will be responsible for paying the difference. If this happens, you can have another appraisal completed or challenge the original appraisal.
5. Closing. Your Realtor will be working closely with the title company by providing them the appropriate documents so you can close quickly. One of the closing documents the lender will require is the title search, to be sure the title is clear from any liens against the property or any other problems. Once the title search comes back clear, both the buying and selling parties will sign the required documents, the documents are filed and the sale can close.
6. Home Ownership. After the documents are filed, either the title company or your Realtor will let you know that the property is yours! It's time for a celebration and to get started on those tasks to handle when you move into a new home!