When you are ready to purchase your new home in Austin or Round Rock, it is important to understand what to expect throughout the entire process. Armed with the right knowledge, home ownership is just around the corner.
Select a Home
Many lenders offer pre-approval, but some may require that you have a specific property chosen prior to discussing your loan options. Upon writing an offer for the property you've chosen, an earnest money deposit is required to “secure” the home while financing is obtained and the inspection is carried out in order to finalize the purchase.
Check Your Credit
Prior to applying for a mortgage, it is imperative to know where you stand from a lender’s perspective. Checking your credit profile is a great idea for multiple reasons, but it is a critical step in the home buying process.
Once a year you can request a free copy of your credit report from each of the three major credit bureaus: Experian, Equifax and TransUnion. Check for outdated or incorrect information or anything that may require your attention. In the event you detect anything, file a dispute immediately to get the information corrected. A free credit report does not include your FICO score, which the bureaus sell for a small fee. Lenders use this score in determining your interest rates and overall creditworthiness, so it may benefit you to check it out for yourself.
Collect Your Documentation
When you apply for a mortgage, you will be asked to supply certain documents and details pertaining to your current financial status, employment and assets, and liabilities. Prior to meeting with your lender, be sure to have your current pay stubs, bank statements, and any other information related to any debts that you owe. You may also be asked to provide your federal tax returns for the last two years. In the event you are self-employed, you will be asked to provide a YTD profit/loss statement, also known as an income statement.
Meet With Your Lender
Now that you have gathered all of your documentation, it is time to meet with your lender. At this point, you will complete a mortgage application and submit it for approval. Depending on the lender, this process can take anywhere from several hours to several days before learning if you are approved or not. The majority of the time, you will get an answer within 24 hours.
Last Minute Details
If your loan is approved, it is time to move on to the next step in the mortgage process. An appraisal and survey will be conducted on the property. This is just as much for your own protection as it is for the lending institution because it may reveal issues with the home’s value or lot boundaries. It is possible for this process to take up to thirty days, at which point the results will be forwarded to the lender. If all goes well, you will go to closing and prepare to move in to your new Austin or Round Rock property!