I am purchasing a home. I have not purchased a home for 8 years so it has been a while since I have gone through this process. I did refinance my home about 4 years ago but purchasing is different. Purchasing is stressful, even for a Mortgage Advisor, like me. I thought I would share my story about my home purchase and mortgage qualifying process.
My wife, Marla, and I made the decision about 10 months ago that we wanted to purchase a new construction home. Being licensed mortgage professionals we ran our qualifying ratios, looked at our assets and had a pretty good pulse on our credit. We knew we could qualify and for how much. We found an area of town we wanted to live and started to look at the model homes. After a few months of casually looking around we found the floor plan and lot we wanted to write an offer on.
Unfortunately, we can’t do our own mortgage and therefore did not have a pre-approval in place. This is one of those do as I say, not as I do moments. We were one of those customers that we are repeatedly telling to get pre-approved so when you find the right home you don’t miss out on the opportunity.
The lot we wanted had just opened up and there were several people interested in this particular lot. We put down a hold on the lot with a refundable deposit but this did not make it ours yet. We still had to get pre-approved and put a much larger non-refundable deposit before we could hold claim to that lot, the desired floor plan, and exterior paint colors we wanted.
Why oh why did we not get the pre-approval ahead of time?
Lesson 1: Get Pre-Approved prior to shopping for a home!
Get started with our FREE Home Purchase Qualifier.
We had to move fast. We did not want to risk losing out on the floor plan and lot we had selected. It was perfect! The unnecessary stress had started. If we had just gotten pre-approved ahead of time, like we tell all of our customers we wouldn’t be feeling this anxiety. But, here we were.
We submitted our application and the required documentation we knew would be required to get pre-approved and quickly! This is where we certainly had an advantage…we knew exactly what we were supposed to do. Within a day we had our pre-approval in hand and we could g back to the builder and secure the lot with a contract and that large non-refundable deposit.
Lesson 2: Follow the instructions of your mortgage professional to expedite your pre-approval process.
Complete our simple mortgage pre-approval letter request.
If your loan officer requests 2 years of tax returns and you submit just one you could delay your pre-approval process. Being a mortgage professional for many years now I can tell you one thing with complete certainty. Mortgage loan officers will not request something from you unless it is absolutely necessary. We don’t want more documentation than we need – that would just make the work on our end greater and the stress on you higher. So, if you are asked for something, it is a very high likelihood that it is required for your approval.
Oh no, the underwriter. Maybe you imagine this cranky, unhappy person going through your bank statements line by line and picking apart your credit report. Well, let me put your fears to bed. I have worked with a lot of underwriters and I can tell you that most underwriters want to approve your mortgage application. They do. Of course they have to make sure you meet the rules and guidelines for the loan program you applied for but they want to find a way to make it work. If they need more documentation, they will ask. If they need clarification on something they will request it.
Lesson 3: Don’t fear the underwriting process or the underwriter.
Especially if you have a Rock-Solid Pre-Approval from the Wynn Team.
The Waiting Game
Whether you are purchasing a new construction home like us or an existing home closing in the next 30-45 days, there is going to be a period of time where you are just waiting. Waiting for something to happen. For us this waiting period was about 8 months. We were pre-approved and through underwriting with a conditional loan approval very quickly but then we had to wait for the home to be built.
Although this was an exciting process sometimes the wait can create unnecessary anxiety. You stress and worry about every financial move you make.
Are we putting too much on our credit cards?
Are we spending too much money?
Should we be saving more?
The list goes on and on and on.
Lesson 4: If in doubt on what you should be doing, ask your Mortgage Advisor!
Get started with a FREE Home Purchase Qualifier.
The appraisal is being completed on the home you are buying. Another stress point for sure. Will the value come in at the price we are purchasing it for? What happens if it doesn’t?
There are so many potential if’s. I often get asked about what if this or what if that specifically about the appraisal process and the potential outcomes.
Lesson 6: Don’t worry about a problem until a problem exists.
Too often, we (yes we – I am always considering what might happen) think about all the potential negatives that could happen before they even happen. And probably 90% or more of the time it doesn’t happen. But when it does we work through it.
This was the major stress point for us. Appraisals, in general are the longest verification piece of the mortgage process. Sometimes getting an appraisal can take weeks. Your loan officer should be planning ahead based on current appraisal turn times to make sure the appraisal is ordered and received within an appropriate amount of time.
Our lender did just that. They ordered it with plenty of time prior to closing. The appraisal process took quite a bit longer than expected. The first appraisal hired ran into a personal matter about two-thirds of the way through the process and could not end up completing the appraisal. The order was cancelled and we had to start over with the appraisal…this time with not nearly as much time as we did when we first ordered it. There was nothing we could do, so we held our breathe.
On the Tuesday prior to our closing set for Friday we were told we had a 50/50 shot of closing on our scheduled close date due to the appraisal process taking longer than normal. We were in an all-out panic! We had vendors, movers, etc all lined up for our move and now we might not close on time. Stress was at a high!
Marla posted to Facebook the day we got word that the appraisal was in, value was good and there were no conditions the next day, Wednesday. It was a huge relief.
With underwriting approval complete you can rest easy knowing the loan approval is done. But the mortgage process is not over yet. Now the mortgage company works to prepare the final numbers for closing so you know the exact amount to bring to the closing table.
Lesson 7: Know the amount and method you must bring funds to closing.
Your loan officer or loan processor should be providing you with the information you need to come to closing prepared. But if not, contact them and ask! You should know the exact dollar amount of the funds needed at closing, down to the penny. You should know what forms of payment they accept – normally a wire transfer or cashier’s check only.
Closing is done, you have the keys to your new home. It is time to celebrate and let go of all the stress you have been holding on to.
Now comes the fun part (yeah, right!) – the move
Find out how much home you can afford right NOW!
Know exactly what you can afford before you start searching for a home.