Your Step-by-Step Guide to Buying a Home

Your Step-by-Step Guide to Buying a Home

Purchasing a home is one of the largest investments most people will make in their lifetime. The process of making such a large investment may feel like constant jumping through hoops filled with new terminology and endless questions. The experts at Dollar Bank help people buy their dream home every day. This helpful guide breaks down the steps you can expect when starting out on the journey to homeownership.

 

Step 1: Pre-Qualification

To buy a home, you first have to verify that you are able to afford one. The pre-qualification process will help you to figure out your ideal price range to make shopping easier. This process requires you to choose a lender and submit initial basic details that you can share with your real estate agent to narrow down your choices!  

For the pre-qualification application, you’ll need the following handy to make the process faster:

• Annual income
• Total monthly debt
• Current monthly mortgage or rent payment
• Anticipated taxes and insurances
• Balances on your checking/savings accounts that will be used as funds for closing

In the current market with a lack of inventory, some real estate agents prefer a pre-approval over a pre-qualification, as pre-approval includes a verification process through your lender to determine exactly how much you are qualified to borrow. Contact your lender to learn more and determine which is best for you.

Top tip:

Mortgage rates vary based on your financial standing. Special rates and programs may be available for first-time and low-income homebuyers. You may also have different mortgage options available (such as FHA or VA) based on how you qualify. We’ll help you determine which is best for you. And if this is your first time buying a house, there’s more you’ll want to know.  

This first step will set you up for success in finding the right home for you.

 

Step 2: Finding your home & submitting your application

We recommend working with a licensed real estate agent to help guide you through the home buying process.  In the meantime, there are ways in which you can begin to get a feeling for what is available in your price range: 

• Websites (like Zillow and Realtor.com)
• Apps (such as Trulia)
• Local online and printed listings  

Once you’ve found the home you’re looking for, it’s time to submit a formal offer with a home inspection contingency.  If accepted, schedule your home inspection and begin your official mortgage application within 10 days of the seller’s acceptance.  If there are issues with the home inspection, you should notify your lender immediately and let them know if you will be moving forward with purchasing the home.  

The mortgage application is a more extensive version of the pre-qualification you have already completed but includes additional details about the property you are purchasing. If more information is needed, your lender will request it at this time. After completing your application, you will then receive the loan estimate and all application documents. You should review all documents carefully and determine if you want to move forward with the lender. Once you decide to move forward, the lender will order a home appraisal to ensure the value and price are accurate and you will pay the lender for the appraisal fee.

The lender will also order the title paperwork for the home with the closing company you selected.  The closing company will assemble the tax and title certificate to confirm no delinquent taxes or liens are on the property.  At this point, you’ll want to coordinate homeowners’ insurance as this is a requirement at closing. You should provide your lender with your insurance agent's name and contact information. There are many different parties that work together to deliver a smooth closing experience.

Are you feeling overwhelmed? Let’s talk. Schedule a time to meet with a Dollar Bank mortgage expert.

 

Step 3: Processing & underwriting

Once your lender receives all of the  documents needed and the processing of your loan is complete, they will underwrite the loan. Additional information may be requested by the lender during the processing and underwriting of your loan. To not delay the approval process, you should provide that information as quickly as possible.   

 

Step 4: Approval & disclosures

Once all necessary information has been verified, your lender will sign off on the loan and send a commitment letter to you and the closing company. You should share your commitment letter with your real estate agent. 

After you've received your commitment letter from your lender, you can set a closing date by contacting your real estate agent or closing company. Once a date and time are scheduled, the documents will be finalized by the lender and sent to the closing company.  

Now you can prepare to close on your new home!

 

Step 5: Closing & moving!

At least three days prior to your scheduled closing, you should receive your Closing Disclosure from your lender. The Closing Disclosure will include the required funds needed to close on your mortgage. This amount represents any credits for hand money and fees that were paid in advance to the lender. You’ll need to bring a photo ID and a certified check with the necessary funds to pay the closing costs and the title company. The closing agent will advise you as to whom you should make the certified check payable. Once everything is signed and accounted for, set a move-in date! The availability of your move-in date depends on the seller’s property situation, which is typically agreed upon ahead of time.    

Homebuying is a multi-step process and you won’t be doing it alone. Dollar Bank’s mortgage experts are available to help you find your dream home. Get in touch with a mortgage representative and let’s start the process.


This article is for general information purposes only and is not intended to provide legal, tax, accounting or financial advice. Any reliance on the information herein is solely and exclusively at your own risk and you are urged to do your own independent research. To the extent information herein references an outside resource or Internet site, Dollar Bank is not responsible for information, products or services obtained from outside sources and Dollar Bank will not be liable for any damages that may result from your access to outside resources. As always, please consult your own counsel, accountant, or other advisor regarding your specific situation.