Austin Home Buying 101 - Your Loan Process
In order to have a successful experience buying your Austin home, it is critical to have your financing in place. Most people require a mortgage to purchase their home, and as we all know, lending criteria have become more stringent over the last few years. Here’s an overview of the loan process that we will navigate together to assist you in buying your Austin home.
1. Contact a mortgage professional. We recommend using a mortgage broker rather than going into your neighborhood bank branch because mortgage brokers can match your situation with a wide variety of loan programs, and banks are limited to the programs within their company. If you would like a referral to a reputable Austin area lender, please call Rodney 512.740.6486.
2. Loan Application. Most lenders will allow you to complete this over the phone, in person, or on their websites. You need some basic financial information such as your income and debt amounts.
3. Credit History. At this step, the lender will pull your credit and the credit of anyone else who is going to be on the loan, even if you have a copy of your current credit report. They will use the middle of the 3 credit bureau scores.
4. Collect Requested Items. Based on your loan application, the lender will request a list of items to verify the information. This can range from tax returns to proof of child support income. It is extremely important to get them whatever they ask for as quickly as you can.
5. Review the Loan Programs. Once the lender has verified all of your information, he or she can advise you on the different loan programs you qualify for, and help you make a great decision on which one to select. It’s important to let us know what you’ve chosen, since the terms of the loan program (such as the amount down, etc) will impact how we write the offer on the home you select.
6. Get a Pre-Approval Letter. This shows that a loan officer has actually reviewed the necessary documentation, put your loan package through an automated underwriting engine, and you have been pre-approved. This is what a seller expects to see with an offer in a competitive market like Austin’s.
7. Find a Home. This is the fun part!!!
8. Write a Contract. Again, the team at Keep Austin Weird Homes will have you covered here.
9. Conduct a Home Inspection. We believe it is imperative to have a home inspection in almost every situation. A ballpark price for the Austin area is $450, and we have several extremely thorough inspector’s we can recommend.
10. Order the Appraisal. Once the home has been inspected and you are through your option period, the lender will order the appraisal. An average fee for the Austin area is about $500. Your lender will make these arrangements.
11. Order Title and Survey. Our office, along with the title company, will assist with these items to make sure the property is free of any liens or boundary issues before it transfers to you.
12. Lock Your Loan. Once you have found a property, your lender will contact you to discuss locking your loan. You can do this anytime after a contract has been executed, up to 10 days prior to closing. Once your loan is locked, your rates won’t go up, even if interest rates do in general.
13. Submit to Underwriting. The underwriter will review all the items that have been requested from you as well as the specifics of the property and your loan.
14. Loan Approval...with Conditions. After the underwriter reviews the file, it will either be approved or approved with conditions the underwriter would like to see more detail on. If any additional items are requested from you at this stage, it is critically important for you to provide them in a timely fashion.
16. Documents Sent to Title / Closing Statement (HUD) Prepared. Now the loan documents can be prepared and sent to the title company for the final closing statement to be prepared. Once the closing statement is prepared it will be sent to your lender and Realtor for review.15. Clear Conditions. Once the underwriter has reviewed and removed any conditions that were preventing full loan approval, your file can be moved to the closing department.
17. Review Loan Details Prior to Closing. You should speak to your lender immediately before closing to make sure you know exactly what to expect when you go to the title company to sign your papers. You will want to confirm your interest rate, how much cash you need to bring to purchase your home, and any additional items you might need.
-By Rodney Campbell