Buying a home is an exciting process, but it can seem a bit overwhelming at times. With the right guidance the loan process can be a breeze or even an enjoyable experience. We have highlighted 9 steps to home ownership  to help you feel more at ease and more prepared for the journey.

With the rewards of owning your own home more and more families are choosing to buy. The most common benefits of owning a home include tax benefits, increasing your future net-worth through appreciation, borrowing power, stability and the fact that you will own your own space. Below is a brief description of each point mentioned.

Tax deduction = more money in your pocket: By owning your own home you will be able to deduct or “write-off” the interest you paid throughout the year along with the property taxes, mortgage insurance, and any improvements that cause the value of the house to increase (room addition, pool, etc…). Also, any and all points paid for your mortgage can be deducted the first tax year after obtaining your loan. Please consult with a CPA or tax preparer to find out more accurate figures based on your financial situation.

• Future net worth: Your home is a safe and steady investment with increasing value and decreasing debt. The higher the value increase the more equity you gain. Equity is the difference between what you owe and what the home is worth.
• Borrowing Power: In the future, once you’ve gained sufficient equity you will be able to borrower against it for purposes of buying a rental property, paying off debt, paying for your child’s college tuition, to make home improvements, etc…
• Stability: It is inevitable that your rent will go up. When the “market” rents increase you better expect an increase in your rent when it’s time to renew. When you purchase a home you can choose a fixed interest rate and a fixed payment for 30 years. To simplify, you payment will not change during those 30 years unless you decide to change the terms of the loans through a refinance.
• Owning your space: Not having to worry about your landlord charging you for any holes you make in the wall or worry about your neighbor complaining that you have the radio on too loud has to be one of the biggest benefits of owning a home to me. Peace of mind is worth a million bucks!

This is the pre-qualifying stage, but don’t get this step confused with a pre-approval.  This step entails three functions (1) a conversation to find out what your short and long term goals are (2) how much of a monthly payment you can and are willing to afford and (3) finding out how much a bank will be able to lend based on certain guidelines. You will be asked to supply your income documentation, financial statements, a credit report, and anything else that will help to prepare a strong loan file for you. Click on the link below to view a list of documents that will be required for pre-approval.

View and Print a Financing Needs List

This is the “meat and potatoes” of the loan process. Now that you’ve supplied information and documentation about your employment, assets, residential history, etc… we will now present you with the options that fit your particular financial outlook and your overall goals. A pre-approval letter will be issued to both you and your real estate agent along with proof of your credit, proof of your available funds, and proof of initial loan approval. In some cases and based on your financial picture we may submit your loan file to an underwriter to get a commitment or full loan approval. This is usually done if your loan file contains anything “iffy” based on traditional lending guidelines. Be prepared for a 1-3 day waiting period.

Now that you are fully comfortable with the terms of your  loan and you have received a commitment from a lender you can now begin your hunt. You will feel confident enough to narrow down your search based on what you can afford, qualify for, and obviously your likes and dislikes. Knowing the market is key to finding your perfect home, therefore; it is imperative that you choose a real estate agent with the right neighborhood expertise. They will be able to inform you of the local schools, local economy, and any other information useful to make a buying decision.

Step 5 – Negotiating the Deal

This fifth step has been known to be the most intimidating part of the transaction. With the right expertise your real estate agent will do the required research to find out the competition you’re up against and guide you to make an appropriate offer. The entire negotiating process will be managed by tracking the necessary contracts, addendums, counter offers and inspections through your real estate agent and/or a transaction coordinator. It’s important to have a real estate professional who will help protect your interest from the beginning to the end of the process.

Step 6 – The Loan Process

Now that you have found your home and your offer has been accepted we will now ask you to update your pay-stubs, financial statements and any other documentation that is date sensitive. A copy of the signed purchase contract and information about the property will be obtained to complete your loan file in order to proceed to the next step. A packet will be submitted to the underwriting department for review and to give a final approval after the file has gone through a thorough quality control. We do this to ensure that we address any issues that we foresee appearing. We strive to take the pressure off of you and we will make sure to make this process as painless as possible.

Step 7 – Closing the Transaction

Between your real estate agent and my team we will make sure all documents are in order to successfully close. Closing consist of the bank funding your loan and the title company recording it with the county. To fund means that the bank will wire the funds to the title company to officially make your loan. After it funds, the title company chosen will record certain documents with the county in which the house is located in; this makes it official.

Step 8 – Move In!

Once receiving confirmation of recording your real estate agent will deliver your keys for your new home. Congratulations on buying your new home. It’s a big step for anyone, so take pride in home ownership.