Purchase process

The Purchase Process

LOAN APPROVAL - FIND A HOME - CLOSE ESCROW

LOAN APPROVAL

It is very important to select the best loan consultant to approve you for your loan purchase. FULL trust is required and this approval process will determine how much home you qualify for and whether you can afford the payment. The process of obtaining loan approval should be done BEFORE you look for a home. Many may qualify for a loan, but cannot or do not want that high of a payment. Your loan consultant should be doing just that: CONSULTING. The usual process:

15-20 minutes taking the application. This is usually done by telephone. Questions pertaining to current residency, employment, assets and information needed to acquire credit will be asked.
Payment comfort range will be discussed. What payment range do you want?
The loan consultant will obtain an fully underwritten automated loan approval based on your needs. This loan approval will confirm payment options and documentation required to complete the loan transaction.
Types of loans will then be discussed. 30-yr fixed versus adjustable, amount of down payment required (if any...most purchase loans can be obtained for 100% financing), seller credits to contribute or pay all closing costs in full, first payment dates, impound account review, and many other loan aspects will be reviewed. The loan consultant should take as much time as required and answer all questions you may have.
Once a desired payment range, type of loan, and purchase price target have been set, the loan consultant will then prepare a loan approval letter to provide to your real estate agent.

FIND A HOME

Although having a realtor is NOT required in purchasing a home, it is highly recommended. Remember, the seller pays the realtor, not the buyer. So your risk having a realtor represent you in finding your dream home is very minimal. Your realtor should be very reliable and trustworthy. It is NOT recommended to use the listing (or seller's agent) as your realtor. Find a realtor who will 100% represent you and only you in finding you your home that meets your needs.

Once a realtor has been chosen (ask Kevin what questions to ask a realtor to help you determine the best realtor for you), the loan consultant obtains his/her contact information.
The loan consultant will have a lengthy conversation with your realtor discussing your purchase price range, payment comfort level, and seller credit options.
The loan consultant will then send a loan approval letter to your realtor.
Look for your new home. My suggestion is to first find the AREA you would like to live in (school district, proximity to mall/church/schools, etc.). Then, narrow down the type of home you would want to live in (number of rooms, yard, etc.). Then, find those homes that meet your criteria. As this process is different for each client, it is usually the most "exciting". Remember, you should already know that the homes you are looking at are affordable to you. This has already been done with your loan consultant. So, enjoy finding the home that fits into the budget.
MAKE AN OFFER: You found the home! Great! Through consultation with your realtor and loan consultant, you will then provide a written offer to the seller of the property. It is possible the seller will counter your offer (called a counter-offer), and then you may accept those terms or counter back. Purchase price, amount of seller credits, loan contigency, and timing of closing are the most notable items that will be renegotiated. Once BOTH parties (seller and buyer) accept the agreement, then you have truly found your next home.
OPEN ESCROW: The selling agent will then "OPEN ESCROW". This means that an escrow company (or attorney depending on your state) will provide an escrow number, open title, and obtain title insurance (title is the right to, and the ownership of, property. A title or deed is sometimes used as proof of ownership of land. Title insurance protects lenders and homeowners against legal problems with the title. Basically, it insures you, as the new homeowner, that there are no liens against the property when you purchase the property...this is always required).

CLOSE ESCROW

This process has several pieces to the puzzle. Although this is the most stressful time for the loan consultant, it should be the least stressful to the buyer. Because your loan consultant took the correct amount of time with you in the beginning of the loan approval process, there should be no surprises and no worries (packing your belongings to move into your new home will be the most stressful!).

ORDER APPRAISAL: The loan consultant is responsible to order an appraisal of the property. An appraisal is a professional analysis used to estimate the value of the property. The buyer is usually responsible for direct payment to the appraiser. The appraisal is sent, via email, to the loan consultant.
COMPLETE LOAN PROCESS: Based on when you obtained the loan approval, the buyer will fax additional paperwork to the loan consultant. Paperwork that may be required include identification documents (usually a driver's license), pay stubs, W2s, proof of assets, and possibly proof of prior rent payments. The loan consultant will review all paperwork and transmit these documents along with the appraisal, purchase contract, preliminary title report, and escrow instructions to the lending bank. A fully underwritten conditional loan approval will then be sent to the loan consultant. The loan consultant will then send any final items (called conditions) to the lending bank in order to obtain permission to order final loan documents.
OBTAIN HOMEOWNER'S INSURANCE: Sometimes called fire or hazard insurance, the buyer of the property will obtain this insurance. Contact Kevin about suggestions for obtaining insurance.
TERMITE INSPECTION: Based on purchase contract negotiations, this may or may not be required and may or may not be paid by the seller. Some lending banks are not requiring this to be completed. However, for a nominal charge ($75-$100), you may want to have this inspection completed for "safe of mind".
HOME INSPECTION: Optional. This is a professional inspection of a home to determine the condition of the property. The inspection should include an evaluation of the plumbing, heating and cooling systems, roof, wiring, and foundation (among other things). Although this charge is around $250-$400 depending on area, you again may want to have this inspection completed for "safe of mind".
CLOSING: Once all loan conditions have been met, all inspections completed, and homeowner's insurance is obtained, final purchase loan documents will be sent to the closing agent (escrow agent or attorney depending on state). You will then be contacted for a "signing" time. Any monies required to close the loan (down payment, etc.) will need to be brought to closing (usually in the form of a cashier's check made out to the closing agent). After signing loan documents, you should have the keys to your new home within 48 hours!

Every loan experience and home purchase is like a fingerprint. Each is different with its own unique circumstances. The above is just an overview and may NOT include every piece of the puzzle. Your loan consultant should be there for you through every step of the process. The most important part of this process is choosing the BEST loan consultant. One you trust. One who doesn't shy away from questions. One who provides great detail. One who looks out for YOUR best interest. One, who gives you, your BEST OPTIONS.

BEST OPTION Home Loans

30725 Point Woods Court, Temecula, CA 92591

Direct: 951-541-1334 Fax (toll free): 866-651-2084

Email: kdraughon@bestoptionhomeloans.com

CA Dept. of Real Estate License No. 01383240