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Nancy Strack |
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Buying a Home As a realtor in San Antonio I'm often asked what is involved in buying a home. I hope you will find the answers to your questions here. If not, please e-mail or call me and I'll get you the answers you need. How can I find out how much home I can afford? I've included a couple of mortgage calculators (Fannie Mae and Freddie Mac) that will give you a general idea of what you can afford but it's best to contact a lender and ask to be pre-qualified for a loan. After a few questions about your income and debts, they can tell you what price home you qualify for. Most lenders are nice people and are eager and happy to help you When should I apply for a loan? The loan process is the major part of buying a home so it's best to get started before you start looking for a home. Being pre-approved for your loan can put you in a better position to negotiate with the seller and it can also shorten the amount of time needed to close on the house. How do I choose a mortgage company? I will be happy to recommend some lenders that have earned my respect over the past thirteen years. Of course you may also want to ask friends for referrals or call any of the many listed in the phone book. You may also want to check with your bank or credit union. I have no association with any lender and receive no compensation for any referrals. I make recommendations only as a courtesy to you. When selecting a lender ask about interest rates, whether you can lock your rate and is there a fee to do so. Be sure to ask about what other fees they charge for their services. Compare and then select the one that offers you the best rates and that you feel comfortable with. Ask them how much you will need for downpayment and closing costs. If you have good credit but are short on money to pay all of your closing costs, etc, you can ask the seller to pay part of those costs for you. Be prepared to make a full price offer, though, if you're going to ask the seller to help with your costs. Also note that not all sellers are willing to pay any of the buyer's closing costs, even with a full price offer. By the way, let your real estate agent know before looking at houses if you're going to be asking for assistance with your closing costs. What's the difference between being pre-qualified and pre-approved? Being pre-qualified is little more than talking with a lender who will run a quick credit check (with your permission) and ask a few questions about your income and debts. Based on that info, they can tell you how much you qualify for. That does not mean that you have been approved for your loan! It's not until you meet with the lender and have provided the documentation they need in order to run a full blown credit check (approximate cost $60) and verify employment, etc. that they can officially approve you for your loan (subject to the appraisal). Again, it's best to be approved for the loan prior to looking for your home. Most real estate agents will not show you any properties until you have been at least pre-qualified. The "pre" just means you were qualified or approved prior to being shown properties. What information does the lender need when I go in for my loan application? Ask the lender what they need but plan on having at least the following: Address history most recent 2 years Assets name, address, account numbers, balance and copy of most recent statements on all bank accounts (3 months). Debts name, address, account numbers, balances and amount of monthly payments on all auto loans, notes to bank and active credit cards. Employment history past two years of employment history with complete names and addresses of employers. Also bring most recent paycheck stub and past two years W-2 forms. Self-employment and Straight Commission bring past two years signed, complete federal income tax returns including all schedules and year-to-date profitand-loss. Legal documents Bankruptcy copy of discharge and schedule of debts and assets. Judgements bring release of judgement. Other Income Child Support Copy of court history or cancelled checks for past 12 months. Rent copy of lease agreement. Other financial obligations Child support, copy of divorce degree, child care. Personal information a photo identification card and social security card. Veterans Certificate of Eligibility, DD214 (discharge papers), Original pay-stub. How much do you charge to find me a house? The seller usually pays my commission so relax and have fun looking for your new home! How long does it take to get into a house once I find what I want? If you followed my advice and have your loan approved prior to looking at homes, all that we need to do is find a house you like (that's the easy part) and then set up inspections, wait for the appraisal, etc. You can usually get into your dream home in as little as two weeks if you already have your loan approved, provided there are no problems that arise prior to closing. Otherwise, count on at least 30 - 45 days. Other than finding the house I like and getting my loan pre-approved, what else is there to buying a home? This information is for those buying a property in San Antonio. When you find the property you like, I will help you write an "offer to buy". It is only an offer (not a binding contract) until all terms are agreed to in writing by both parties. Until the seller agrees (in writing) to your terms, the seller may accept any better offer that comes in. That's why you should be pre-approved for your loan and make your first offer your best one. Be prepared to write a check for about 1% of the sales price as earnest money when you make your offer. Make sure the money is in the bank to cover the check because it will be cashed once your offer is accepted. An appraisal is required and is part of your closing costs so also plan to write a check $350 when you meet with your lender unless the seller has agreed to pay your closing costs. Once your offer is accepted, you have a legally binding contract with the seller. The seller may continue to show the property for back-up offers but can't accept any other offers at this time. Our contracts provide an Option Period for usually 7-10 days to allow you to have the property inspected, to verify or visit schools, etc that would influence your decision to buy the property. You pay a nominal fee to the seller for this option. It is submitted along with your offer. You will need to get the property inspected by an inspector of your choice during this period. This will include a termite inspection. Based on the inspection, the Option Period allows you to back out of the contract within that time frame if you're not happy with the inspection or if the seller will not do any repairs. Plan on spending about $200 for the inspections. By the way, if you decide to exercise the option and back out of the contract during the option period, the seller keeps the option fee but you get your earnest money refunded. If you back out of the contract after the option period has expired, you may lose your earnest money as well as the option fee paid to the seller. You will also need to arrange for hazard insurance for the house prior to closing. Call several companies and compare rates, making sure they're basing it on the same coverage. You may get a discount if you use the same company that insures your automobiles. You don't usually have to pay the premuim until closing and it is included in the pre-paid items in your closing costs. On the closing date, we will go to the title company (or attorney's office) so you can sign the papers transferring the title into your name. You will need to bring a cashier's check for your closing costs (including the down payment) and a photo ID to closing. You'll know the amount for the check before closing. Buyers and Sellers have separate appointments for closing. When do I get the keys to the house? After the closing papers have been signed by you and the seller, the title company faxes the papers to your lender for approval. Depending on your contract with the seller, once the lender gives approval, the keys can usually be given to you. However, don't plan on scheduling the moving van without checking with your agent first! |
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