The Homebuyer's Reference

The Financial Process
Here’s an easy way to understand the financial steps you’ll need to take to guide you toward your new home.

• Calculate your Budget
• Apply for a mortgage/ paperwork/ loan application
• Lender begins processing application
• Lender provides booklet of estimated closing and related costs
• Lender institution requests an appraisal of home, a credit report and verification of employment and assets
• Estimate of your loan costs in form of initial Truth in Lending Disclosure Statement
• Lender evaluates the application and approves the loan
• Search begins – Sales Associate shows you multiple listings
• You find the house you want
• You make an offer
• Lender disburses funds to closing agent
• Sign closing documents and loan is funded
• Appropriate documents recorded at county recorder’s office
• The home is sold and it is yours

How Much Can You Afford?
Before you can begin to search for a new home, you need to determine your budget and estimate how much you can afford. One of the most important factors in figuring out your financial budget is getting pre-approved for a mortgage. Pre-approval uses basic information as well as electronic credit reporting to determine whether a lender will loan you money. If you are pre-approved for a mortgage, the lender has given you a commitment to support your new purchase.

Once you have been pre-approved, you need to decide which type of mortgage to get. This decision is usually based on the interest rate of the loan and how much time you are given to pay the lender back.

When you apply for a mortgage, you will need to furnish information regarding your income, expenses and obligations. To save time, have the following items available for each borrower:

• Two most recent pay stubs
• W-2s for the last two years
• Federal tax returns for the last two years
• Last two months of bank statements
• Long-term debt information (credit cards, child support, auto loans, installment debt, etc.)

Calculating Your Budget
To estimate your budget, add up your total financial worth and then subtract all the costs included in the purchase.

Here are some of the expenses you will carry:

Down Payment
Most homeowners contribute a down payment on his or her new property. The down payment is a percentage of the purchase price that the buyer pays in full before closing. The larger the down payment, the smaller your mortgage will be.

Cost
There are quite a few costs when you’re buying a new property and it’s important to factor them into your budget.

Here are some examples:

• Monthly Costs: The calculation of your entire monthly costs including the mortgage, insurance, taxes, etc.
• Points: Borrowers have the opportunity to reduce the interest rate on their mortgage by paying points at the beginning of the loan. One point is one percent of the new loan.

Final Budget
Now you're ready to calculate your final budget. Remember to include all of your available monies, monthly salary, additional income, and then subtract the down payment, monthly mortgage payment, closing costs, moving costs, and any additional expenditures you might accrue. When you have arrived at your estimated budget, you are ready to begin the search for your new house.

The Fun Begins
Can you picture your dream house? Does it have a huge backyard? What kind of neighborhood is it in? Is it important to have a good school system nearby? What about public transportation or daycare facilities? Do you want to live by a lake, a river, or a town? These are just a few of the questions you should consider before you begin your search.

Writing The Offer
Once you’ve found the perfect home, a Coldwell Banker® Sales Associate will write up the offer.
After the offer is accepted, there are various steps that need to take place before you can close. These include the loan application, qualification and commitment, all inspections completed and repairs made if necessary, property is surveyed and appraised, the title is analyzed and the title insurance commitment is issued, and you have secured homeowner’s insurance.

The Closing
This is the meeting where the sale transaction if finalized. Your Coldwell Banker® Sales Associate will guide you through all the closing procedures ensuring the Disclosure Statement is released, money is properly exchanged, all paperwork is accurate, the agreements are signed, and the title of property is transferred. This is the last step before you can call the property your home.

Homebuyer's Checklist

• Familiarize yourself with the mortgage process
• Get pre-approved and pre-qualified
• Get finances in order to prepare your budget
• Identify your needs and wants
• Find the home that meets your criteria
• Negotiate a price and make an offer
• Arrange for home inspection
• Confirm closing date
• Conduct a walk-through of home
• Close and settle deal