July 20th, 2018 7:46 AM by Jackie A. Graves, President
Buying a home can be
overwhelming, especially for first-timers. Once you find the house of your
dreams, how do you navigate the process from start to finish?
“Assuming you have fallen in love with a home and it’s the right
one for you, it’s important to be organized and disciplined,” says John Pataky,
executive vice president for consumer and commercial banking at TIAA Bank. “Put
in the time and the effort on the front end of the process before you even make
that initial offer. Put yourself in the best position to see the transactions
your financial house in order
Pataky says there are a number of things you should work on
before viewing your first home. Research how the home buying process works.
Understand your budget and what you can afford. Work with a lender to get
preapproved for a mortgage. Get your credit and finances in good standing. Set
money aside for a down payment as well as closing costs. He says being
organized can help you act quickly once you find the perfect house.
Submitting an offer
When presenting an offer, it needs to be in writing and accepted
by all parties. Pataky says you can soften what is normally an impersonal
experience by attaching a written letter with the offer. In the letter, explain
to the seller why you are the right person to buy their home.
Be ready for some stiff competition. Depending on where you
live, there could be as many as six offers for the same property at the same
time. In some markets, you may also be competing against cash offers. Don’t be
discouraged if your first offer is not accepted. He says some consumers search
for a while before finally purchasing a house.
If you are a first time home buyer, most likely you will need
financing. Pataky says this is where being organized is important. When
applying for a mortgage, all of your personal information should be at your
fingertips, including your social security number, employment records, bank
statements, retirement plan, and investments. Be prepared to package and
deliver all of the documents/information at the same time. He says the entire
process from submitting an offer to closing can be shortened if you deliver all
of the required paperwork at once, instead of separately.
Typically, within 10 days or so of applying for financing, you
will receive various documents from your lender, including a loan estimate. The
document will detail the estimated closing costs, as well as the amount of
money needed to close the loan.
If you are using funds that are being gifted to you to buy your
home, Pataky says it’s important to have a discussion about this early on with
your lender. Make sure you share any relevant documentation to prevent
unnecessary delays in the process.
from processing to underwriting
After financing is approved, the loan will go through processing
and underwriting. During this part, the lender may reach out to you for
clarifying information. As the borrower, make sure you have provided them with
good contact information. The same applies to the co-borrower if there is one.
When you are going through this process, Pataky advises
consumers to avoid any large fluctuations in cash balances. If it can be avoided,
don’t move funds or make any large purchases. He says it's important to show a
stable financial picture throughout the application process.
Assuming the loan has been approved and all of the conditions
are met, you will receive closing instructions. The information will include
the date and time of the closing, the final amount of funds needed to close and
instructions on how to deliver the funds to the closing agent. Generally, the
preferred method is wire transfer. Cash or personal checks are typically not
accepted. After each party reviews and signs the documents, the ownership of
the home transfers to you. Congratulations, you are now a homeowner!
“It can be an overwhelming process if people aren’t first and
foremost organized, somewhat disciplined and prepared for the process,” says
Pataky. “There are easy ways to do that to take the pressure off what can be a
less than thrilling experience for some consumers.”
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