July 31, 2020

How to Turn the House You Want Into Home

Tired of renting and ready to find a home of your own?

According to the National Association of Realtors, you’re not alone. First-time home buyers accounted for a third of home sales last year. It’s an exciting experience, but if this is your first time buying a home, you may want some help.

Whether you’ve already found your new home, or you’re just beginning your search, we’re here to help. We’ve got lots of educational info on our site—for example, free online calculators that help estimate your monthly payments and compare the costs of renting vs. owning a home.

At BayCoast Mortgage, we never take a cookie-cutter approach to mortgage lending—our goal is to help you move into the home of your dreams, on financing terms that fit your family’s situation. Let’s take a closer look at the mortgage process, so you’ll know everything you need (and what we’ll need) to help you get into your new home.

1. Get Pre-Approved

Simply put, a pre-approval from BayCoast gives you the purchasing power you need to shop smart. In many cases, real estate agents won’t begin to help you find a home until they know you’ve been pre-approved.

A quick note—we recommend getting pre-approved instead of pre-qualified, because prequalification doesn’t carry nearly as much weight with sellers and real estate agents.

Pre-approval gives you a guaranteed approval for a certain amount of money, as long as all conditions are met.
On the other hand, pre-qualification is basically just a hypothetical conversation about what you might be able to afford, with a limited look into the financial data that actually matters.

2. Make an Offer

Once you’ve picked out the home you want, make your offer. If you’re working with a licensed real estate professional, they’ll help you with this step and make sure your offer includes specific language designed to protect your interests, and that home inspections show no major issues.

Best of all, the pre-approval process we mentioned in step one strengthens your buying position, which means home sellers will know you’re ready and able to buy (when comparing your offer to others from would-be buyers who have only gotten pre-qualified.)

3. Complete Your Loan Application

After your offer has been accepted, it’s time for us to update your application based on the Purchase Agreement. During this step, we’ll also request an appraisal for the property you’ve chosen, as well as financial documentation that supports your pre-approval.

We can pull some of the info we need from what you told us during pre-approval, but we may ask you more about your job, income, assets and debts—and ask you to update that info with supporting documents (like your W-2s, bank statements, and paystubs).

Then, you’ll get a chance to review your Loan Estimate. (With certain types of loans, you may receive a Good Faith Estimate or a Truth-in-Lending disclosure instead.) No matter which document you receive, you’ll be able to see your estimated closing costs, the amount of your monthly payments (which will include principal, interest, taxes, and insurance amounts), as well as the interest rate you’re paying to borrow the money needed to buy your new home—all written in an easy, understandable way.

4. Processing & Underwriting

Loan processors take all the documents and info related to your mortgage loan, make sure nothing’s missing, and put them together for an underwriter’s review. During processing, we’ll also order your property appraisal, help schedule a home inspection, and complete a title search (to make sure there’s nothing weird going on with your soon-to-be property).

An underwriter makes the final decision to approve your mortgage, based on a careful evaluation of everything they’ve received, as well as a close look at your credit history and ability to pay back the loan.

Since this phase is the most “hands-off” for you as a buyer, we’ll be sure to keep you informed every step of the way—we know good communication relieves stress and provides clarity as your mortgage application is undergoing its final review.

5. Close on Your New Home

After an underwriter approves your loan, the final countdown begins! A closing meeting will be scheduled (usually at a title company or lawyer’s office). But, before that date comes, you’ll have a chance to review your Closing Disclosure—a document that confirms the expected costs shown on the Loan Estimate you received earlier in the process.

You’ll also have a chance to do a final walkthrough of your new home, to make sure the seller has completed construction (in new homes) and made any repairs that were agreed upon, based on the results of your inspection.

At closing, you’ll sign a lot of forms. Some will be based on the sale of the property (between you and the seller), with others focusing on the lending agreement between you and your mortgage professionals.

After that, you’ll receive your keys, along with best wishes from all of us at BayCoast Mortgage. Congratulations on your new home!