Pre-approval
The first step is to get pre-approved for the loan. This is where you discover how much home you can buy, how much it will cost to get in, how much the payments will be, and what type of financing is best for your situation. When you talk to Bob or another lender to obtain your pre-approval, you will discuss many aspects of your personal finances. You will review your credit history, discus which mortgage type and down payment assistance programs fit your situation. This process also requires that you supply the lender with various financial documents to document your income and assets. When you have completed this process, you will have the information you need to start looking for a home.

Finding a Home
Armed with the information from your pre-approval, you are now ready to do the fun part – find your new home. The first step your Realtor® will take will be to sit down with you to find out what type of home you want, how many bedrooms and bathrooms, if you absolutely have to have a fireplace, or large backyard or room for horses. This is a very subjective process and a good Realtor® will spend time really getting to know you and your needs. At this time, you’ll also discuss the market in your price range, it may be that homes in your price range are selling very quickly and ‘time is of the essence’, or you may be able to relax and take your time. Either way, once you’ve determined what you’re looking for and where, your Realtor® will go to work. Many Realtors® have ‘Home-Finder’ services and can set you up to receive periodic e-mail when properties that meet your requirements come on the market. If you have e-mail at home, this is a great service.

Making an Offer
When you find a home that you would like to buy, your Realtor® will sit down with you and go over all of the data available on homes that have sold, or are in the process of being sold, to assist you in determining what price to offer. Your Realtor® will also go over the rest of the contract to be sure that you understand all of the things that go into the offer. Often the Realtor® will check with your lender at this time to see if anything has changed since your original pre-approval, and to check on current rates so that the contract will be correct. You might want to have your lender send you an updated Good Faith Estimate to see just what the cash investment, and payments will be on this particular property, at the price you expect to pay, given the rates of that day.

Getting the Offer Accepted
Once your offer is submitted, the ball is in the seller’s court. The seller can reject your offer accept your offer, or offer you a counter offer. If your offer is rejected, you have to move on and find another home. If your offer is accepted, you move on to the next step; if you receive a counter offer, you can accept the new terms, or re-counter their offer. (This process sometimes can go back and forth many times.) Once you have an accepted contract, your agent will usually contact your lender with the specifics of the contract, and fax them a copy. The lender will need to know the purchase price, terms and the allotted length of time agreed to before the close of escrow. Then the fun starts!

More Loan Paperwork
If you spent the time to go through and sign the loan application and other required forms at the pre-approval appointment, this step is pretty simple. Your loan officer and processor will work together to make sure that all the documentation that you provided is up to date. For example, it may have taken you a few months to find just the right home; in this case they will need your most recent pay stubs, and/or bank documents because the ones you provided at application are now a few months old. This is also when they usually collect the appraisal fees as well as any other fees associated with the loan programs chosen. You will need to get these required documents to your lender so that the loan file can be completed.

Your mortgage company will then begin the process of verifying all the information that you have provided. They may send official documents to your employer(s) asking for confirmation of your employment; they may contact your bank and up date your credit profile. They will also be obtaining the other documentation necessary to complete your loan application. These items include, but are not limited to: the Preliminary Title Report, and the completed sales contract. Depending on the loan program, there may also be other documentation required, such as a landlord rating, proof you attended required educational seminars, three year Federal Tax Returns and several forms required for various housing agencies.

Your mortgage company will then begin the process of verifying all the information that you have provided. They may send official documents to your employer(s) asking for confirmation of your employment; they may contact your bank and up date your credit profile. They will also be obtaining the other documentation necessary to complete your loan application. These items include, but are not limited to: the Preliminary Title Report, and the completed sales contract. Depending on the loan program, there may also be other documentation required, such as a landlord rating, proof you attended required educational seminars, three year Federal Tax Returns and several forms required for various housing agencies.

The Inspection Period
At the same time your agent or Realtor® is working to determine that the property you selected meets the standards you expect. The first thing that a seller provides is a Transfer Disclosure Statement (TDS), this statement tells you everything that they know about the home – cracks in the driveway, the heating system is inadequate etc. Read this document carefully and ask your Realtor® if you don’t understand something. Immediately after receiving the TDS, your Realtor® will schedule a home inspection. A through Home Inspection, by a reputable company, takes over 2-hours and will check the home's structure, construction and mechanical systems, and appliances. When you receive this report you will know everything you need to know about the home. This inspection might trigger your Realtor® to schedule another inspection or prepare a Repair Addendum to your contract. In the Repair Addendum you’ll ask the seller to fix some or all of the items identified in the home inspection. The seller may only agree to fix a few of the items, then you’ll discuss with your Realtor® if you’re willing to buy knowing that a few things will need attention. If everything looks good after your inspections are complete, you or your agent should contact your lender to get the appraisal ordered.

Final Loan Approval
When the appraisal is complete, the loan processor will package up all the information that they have collected and send it off to an underwriter for final approval. Don’t misunderstand, your loan is approved - the underwriter at this point is looking to make sure that they have all the required documentation to fund the loan, and that nothing has changed since the original loan pre-approval. When the funding lender is satisfied that all of the documentation is completed, the loan documents will be forwarded to escrow for your signature.

Signing Your Final Documents
This is when you meet another very important person – the escrow officer. They do not work for anyone in the transaction – their job is to be the neutral third party that makes sure that everything is done correctly. They will coordinate the Title Insurance and Homeowner’s insurance, and make sure all of the documents are signed by everyone involved in the process. If there is a misunderstanding, or someone has not done what they contracted to do, the escrow officer will merely point out the problem, and allow everyone involved to work it out.

Once the escrow officer receives the loan documents and reviews them, they prepare their escrow instructions. These papers include the settlement statement that shows where all of the money is, or is going. It is very important that both your lender and Realtor® review this document to be sure that it accurate. Once this is done, you and the escrow company will set up a time for you to come and sign your final documents. You should at this time, make sure that the escrow company has the homeowner’s insurance information so that that can be included. Be sure to check with your lender to make sure there are not any last minute conditions that need to be met. Good lenders and Realtors® will make every effort to attend the signing as well to make sure that you understand everything.

You should set aside about an hour to sign all of the escrow and loan documents. If you need to bring in any money, it needs to be in the form of a cashier’s check, payable to the escrow company. Personal checks can be accepted, but may delay the closing. You also need to be sure that you have your Driver’s License or other acceptable photo ID with you so that your signature(s) can be notarized.

The Final Step
After everything is signed, the escrow company will sent the loan documents back to the funding lender for review. They check to make sure that all of the documents are properly signed – and that all of the documents are included. Once they are satisfied that everything is complete, they will “fund” the loan. This is usually done via a wire transfer from the funding lender to the escrow company’s bank. Once the escrow company confirms that they have received the money from the funding bank, they will record all of the documents at the County Recorder’s Office. As soon as the documents are recorded, YOU ARE A HOMEOWNER!!!