Buying your first home

Buying Your First Home and the Loan Process


Well it’s time to buy your first home but you just don’t know how to start the process, Let me explain…

There are generally 3 important factors in determining if you can qualify to buy a house

1. Debt to Income Ratio - (this is simply figured out by Dividing how much money you bring home every month by how much money you spend on bills every month.) This total should be no more than 50%.
2. Credit Score – there are 3 categories to determine what type of loan scenario you fit into, 680 and above - Prime or Conforming, 550 to 679 - Sub Prime or Non Conforming & 549 and below - Hard Money.
3. Loan to Value – this is calculated by Dividing the sales price of the home you are buying into the loan amount you are applying for. This number should be preferably 95% or less which means in the loan market, these days, you will need to come up with at least a 5% down payment.

The Real Estate Agent you pick to find you a home will most likely know of a mortgage broker or loan officer that can get you pre-qualified, which simply means that thru the steps above a Mortgage professional can tell you how much of a house you can afford to buy and then give you a certificate to show how much of a loan you can qualify for.

Once you have been pre-qualified on a home you will be able to shop for a home you can afford with your real estate agent and find a house which you would like to live in.
Once you have found your new house it is time to start the negotiations with the seller. This is accomplished by making an offer to the seller for their home by filling out a Purchase and Sale Agreement between yourself and the seller with the terms and amount of money that is acceptable to you for the purchase.
At this point the Seller can either accept your written offer or give a counter offer for your consideration which you can agree on or not.

Let us assume that the seller agreed on your purchase price. At this point the Loan process gets started.

1. Have your Real Estate agent or yourself bring a copy of the purchase and sale agreement to your loan officer who gave you that pre-approval and he/she will start processing your loan.
2. The Loan officer will be asking you for certain documents in order to satisfy the loan conditions for the Lender. You should have these ready (i.e. 2 years tax returns, 2 months paycheck stubs, 2 months bank statements, copy of lease or rent agreement, copy of drivers license and social security card and proof that there is a reserve of at least 1 to 2 months payments deposited into your bank account as well as proof of the down payment you will be supplying for the purchase. (In some cases the seller can gift you your down payment, talk to your Real Estate agent or Loan Officer about creative ways of financing.
3. You will sign a bunch of State mandated disclosures for your protection and then An Appraiser will be sent to the home to verify value and then the loan officer will get the Title report of the home and also start Escrow.

Once you have met all the conditions of the lender your file will get final approval and Escrow will be notified to set up a signing so all sales can be finalized.
At this point Escrow will call you to set up a time for you to sign all your final documents and your loan will now be funded and you should receive the keys to your beautiful new home.

This process of buying your first home and the loan process can take up to 30 - 45 days depending mostly on your ability to provide all the documentation the lender needs to fund your loan, which; if you had all your paperwork ready to give the Loan officer at the time you apply for the loan, this process can take as little as 2 weeks.

I hope I have helped in the understanding of buying your first home and the loan process.

Thank you,

Sky Benson
Sr. Loan Officer
National Lending Corp.
206-664-0209

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www.creditfilerepair.info and www.financeinformation.info