prequalify, preapprove? where do I look to get help? a broker, lender..century 21 or lending tree..etc. Please give detailed steps in the process so I can understand how it works and what I need to do.
thanks.What are the steps to a mortgage?
We just started looking, as well, so I will tell you what we've found so far. :) You'll want to find a realtor, and a place to pre-qualify. If possible, get a pre-approved, as well, but pre-qualifying should be enough to at least start looking. I found a site that is great for finding lenders, called Zillow (zillow.com). You may want to check it out, as well. Be sure to shop around for the best deal! Once you find a realtor and a lender/broker, start looking at homes. I chose to use realtor.com to start my search. Your realtor will also be able to help you find listings. Try to find someone who is familiar with the area you are looking to buy in. They will know things that are fairly important about the home and can recommend it (or not). When you've found the house you are interested in, you place a bid on the home. Most people bid slightly under what the asking value is, unless it is an aggressive market. The owner can then make a counter offer, or reject the bid. You can have stipulations in it, as well. You may require them to make a repair, but give them the asking price. Or perhaps have them pay some of your closing costs or even a portion of the downpayment! There's a ton of options out there! After your bid is accepted, there's a bunch of paperwork, but we haven't gotten that far yet. :)
Before you start, be sure to read up on some of the scams that can happen during the process - such as giving earnest money, and then having your bid rejected and not given back the money. It could save you a lot of trouble!
Good luck in your search!What are the steps to a mortgage?
Hi,
The first thing you should do is get a realtor. They will refer you to a good lender, then the lender will prequal you for a mortgage. After that let the realtor know what price range you are in and they will start searching for homes that meet your criteria.
Once you find a home the realtor will help you come up with a good offer and then present it and negotiat on your behalf. The realtor will also walk you through all of the steps from begining to end. And the best part is the buyers agent is free, the get paid a commision by the seller not you. Good Luck
Hi,
These are the steps I would suggest:
1) Go to www.AnnualCreditReport.com for a free Credit Report to see if there are any unhappy items in your Credit Profile.
2) Take a look at your personal budget %26amp; determine the maximum that you comfortable paying each month.
3) Gather your financial documents together (Paystubs to 1 month, Federal Tax Returns for 2 years, Bank Statements, your credit report from above %26amp; your budget)
4) Contact a mortgage professional to get pre-qualified, your will need the items from above. (Being Pre-Qualified means your documents %26amp; application has been reviewed %26amp; the person or company doing the review has determined a purchase price range for you. Pre-Approved means your application as being underwritten %26amp; you have been approved for a specific loan amount)
5) Contact a Realtor or Real Estate Professional, with Pre-Qual %26amp; budget in hand you are ready to begin the next step, which is finding a property.
I always suggest creating your budget so will know the max you can handle before sitting down with anyone. There are bound to be expenses that will not be reflected on your credit report that only you are aware. With FHA loan the guideline says, 29% of your gross income can be used to pay your mortgage payment (that includes Property Taxes, Insurance, etc) %26amp; 41% of your gross income can be used for your mortgage payment plus your other credit debt. Although, the 29/41 ratio is not written in stone %26amp; can go up well over that figure in some cases. Your mortgage person can go over these points with you in detail. it is just important for you evaluate your numbers before sitting down with anyone, so you know what you are comfortable with and can personally handle.
I hope this helps, drop me a note if you have any other questions.
I would start by looking to see if there is a first time homebuyer education program in your city/town. If you go through one of these programs, you often can qualify for special discounts on loans and help with your downpayment.
Next: get your credit report for free at www.annualcreditreport.com and review it to make sure there is no negative information on it (such as late payments, collections accounts, etc.). Negative information will make it more expensive for you to get a loan. If there is some, even if it is there in error, get it fixed before you shop for a loan.
Next: Figure out what you can afford to pay per month. Bankrate.com has great loan calculators where you put in various amounts and interest rates and it tells you per month how much you will have to pay the bank. Keep in mind that is just principal and interest. You will also have to pay property taxes and insurance, so whatever number is on bankrate.com, add another 1/3 to it to cover your taxes and insurance.
A bank will want your total house payment to be no more than 1 week's gross (before taxes) pay, and your total house payment plus all other loan payments (credit cards, car, student loan) to be no more than 36% of your gross monthly pay. If you have really good credit history, they might approve you at 30% of gross monthly pay for your house payment.
Once you have a rough idea of these numbers, talk with a real estate broker in your area about what you think you can afford to borrow and what types of houses are in that price range. Make sure you include in the discussion how much money will be needed upfront to close the deal. When you buy a house, you will need at least 5% of the purchase price as a downpayment, and as much as 15% of the purchase price to get through all the closing costs, upfront payments, inspections, insurance, etc. Knowing you will have enough cash is critical.
Next: Get your documents in order. Mortgage lenders are going to want to see the last three year's income taxes and W-2s. If you are using savings for the downpayment, they will want to see at least six months of bank statements to see where the money came from. You will also have to fill out a detailed application listing everything you owe, including credit cards, so hold onto all account statements that come in the mail for the next month so you have the records ready to go.
Next: Shop for banks. Your broker might have some good suggestions. I personally like credit unions as they tend to have lower rates than regular banks. Online resources are good too, but keep in mind that the thing you want to compare is not just the interest rate, but all the fees and costs as well. Look for something called the ';APR'; which includes the fees to compare apples to apples. Sometimes banks offer a small discount on the rate if you agree to have your payments taken electronically from your account, so look into that discount if you don't mind that type of payment.
Good luck!
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