FIRST-TIME HOMEBUYER GUIDE
Buying your first home can be overwhelming. But when you have the right resources professionals by your side, buying a home is a milestone to celebrate rather than a hassle. Follow this guide to get started on the path to homeownership:
5 Steps to Owning Your Home
STEP 1: BECOME PRE-APPROVED BY HPW TOWNE MORTGAGE
One of the most important steps in buying a home is obtaining financing. Before you even start searching for your dream home, you should talk to HPW Towne Mortgage and determine what you can afford and learn about what types of loans are available.
STEP 2: FIND YOUR HOME WITH PROFESSIONAL GUIDANCE BY A LICENSED REALTOR.
Looking for a home to buy is very different than looking for a home to rent. There are multiple ways to find your new home and the home buying process can be confusing, especially if you’re a first-time buyer. Your trusted agent can help you navigate the market and simplify the process.
STEP 3: MAKING AN OFFER AND SECURING A RATIFIED CONTRACT TO PURCHASE
- So you think you've found your new home...
the next step is to make an offer! Every market is different, but if you've found the right one, it's best not to wait. Your Realtor will work with you to determine the best sales price and details of the offer.
- You'll need a Pre-Approval letter in hand before most sellers will consider your offer.
- There may be a bit of “back and forth” negotiating with the Seller before both parties reach an agreement and sign the contract.
- Most contracts require an “Earnest Money Deposit” from you which will be applied to your down payment or closing costs at settlement.
STEP 4: PRE-CLOSING
Once you have a ratified contract, you’re officially on the way to purchasing your new home! Before you get to closing, there are a few more important steps:
- Financing – Finalize loan product, discuss rate lock options, and ensure HPW Towne Mortgage has all documents needed to process and underwrite the loan.
- Select closing or settlement agent and secure homeowner’s insurance for your home.
- Appraisal – HPW Towne Mortgage will coordinate an independent, licensed appraiser to determine if the property's valuation is satisfactory.
- Inspections – Your REALTOR® will coordinate property specific inspections as needed
- If your property is a condominium or part of a homeowners association, your REALTOR® will help you understand the applicable terms and conditions.
STEP 5: CLOSING (A.K.A. SETTLEMENT)
You’ve found your home, your offer has been accepted, the financing is in place and the inspections are complete. Now, there’s just one more key step in the process—closing!
- The closing occurs when all the conditions of the contract have been met (full loan approval, evidence of clear title, insurance is in place, etc.).
- Prior to the actual closing date, expect to review the list of fees and the terms and conditions of the contract. In addition, you'll need to know the amount that you'll need to bring to closing. Your Realtor and HPW Towne Mortgage will assist you with this process.
- Closings generally will occur at the office of the settlement agent you selected. At the closing, the lender “funds” the loan with a wire to the closing agent who disburses funds in exchange for the title to the property. This is the point at which transfer of ownership occurs and the buyer receives possession of the property.
- Remember to carefully review all documents before signing. Be sure to ask the closing agent if you have any questions or concerns.
- Get the keys to your new home!
THE PRE-APPROVAL PROCESS
The application requires your personal information as well as your employment and residence history for the past 2 years. You can complete the application online at www.patmillermortgage.com, in-person or over the phone with Pat.
We will also require:
- Copies of your pay stubs for the past 30 days
- Copies of your Federal tax returns for the past 2 years (include income attachments such as W-2 forms and all schedules)
- Copies of your asset statements for the past 2 months (checking, savings, stocks, 401k, etc.)
SOURCES OF DOWNPAYMENT
If you’re like most people, the down payment on your house will likely be one of the biggest cash investments that you’ll make. There are a number of ways that you can get that amount of cash together.
SAVINGS - Buyers often save regularly for years by reducing expenses, taking a second job or getting a smaller apartment if they are renting.
GIFT - If you accept a cash gift, you’ll need to get it clearly in writing that the person making the gift has no financial interest in or obligation toward the property. A bank will not accept it if your “gift” is really a loan.
PROCEEDS FROM SALE OF EXISTING HOME- If you sell your home before you buy your next home, you may have proceeds from that sale that can be applied to the down payment on your new home.
SPECIAL PROGRAMS- State and local governments offer down payment assistance to low- and moderate-income homebuyers. Many nonprofit organizations also offer down payment assistance. Contact your bank or your state housing authority for information on these programs. If you choose conventional financing (a loan other than FHA*, VA, etc.) and you have less than 20% down, you will be required to pay.