If you sat on the real estate sidelines in 2021, you might be wondering what it’ll take to realize your dreams of owning a home in 2022.
There are no major indicators that things will slow down in 2022, but there’s some hope that prices will increase with less fervor and there’s a possibility that supply will also increase, if ever so slightly.
Regardless of the exact market conditions, future homebuyers must prepare and position themselves to conquer the competitive real estate market. With that in mind, here are the steps you should expect to take as you get closer to the homebuying finish line.
Start the loan application
The order of operations to homebuying starts with the loan application.
Starting this process early will give you enough time to get your affairs in order and enter the market from a position of strength.
Dust off credit report
If it’s been a while since you’ve taken a close look to your credit report, now is the time to pay extra close attention.
As part of the application process, our team will pull your credit report, but you can do the same on free websites or through your credit card company. Getting a snapshot of the health of your credit will help you prepare for the subsequent steps.
Sign off on communications
Per federal law, you’ll be asked to consent to receive information from our office.
We will send you a link and you can submit your consent via eSign on your smartphone. It’s really that simple.
Your lending team will give you a detailed list of the required documents you’ll need to formally apply for a loan.
These include one month of pay stubs, two years of W-2s or 1099s, two years of federal tax returns, photo identification, banks statements and a few others depending on your unique situation.
Behind-the-scenes process begins
With all your pertinent paperwork and information submitted, the team of underwriters will begin the nitty-gritty work of processing your loan.
Our team can do it accurately and efficiently with the FastTrac underwriting program.
You can expect to receive a decision on your full loan approval within three short days, giving you insights into your exact buying power and how much you would pay on the monthly mortgage. This information is indispensable as you narrow down your wish list of homes and budget for your new life as a homeowner.
Get green light
Within 72 hours, you will receive full approval, allowing you to select your dream home that matches your budget and goals.
With most of the heavy lifting behind you, now is the time to make an offer on a home.
As part of the process, the selling party will ask for an earnest money deposit. This lets you get the ball rolling on the purchase and sale agreements.
Pore over paperwork
With the help of your real estate team, now is the time to review and sign disclosures. You’ll be asked to eSign to verify your intent to move forward with certain steps, such as inspection and appraisal.
Lock in rate
Once your offer is fully accepted, then you can lock in your quoted interest rate.
At the same time, the home inspection will be conducted per your agreement with the seller.
Review final list
With so many moving parts to loan processing and homebuying, it’s possible that the lender will need additional documents. That’s when the list of final needs comes into play.
You and your team will review the list and make sure everything is in and verified. This is also the time to get estimates on things like home insurance.
With the finish line coming into focus, it is time to order the appraisal.
The appraisal is ordered through an independent third-party vendor and performed by an independent third-party appraiser, so all parties, including you and the lender, are formally informed of the home’s value. This process takes anywhere between a few days and 10 days. Federal law requires the lender to provide a copy of the appraisal to you.
Submit to underwriting
Once the appraisal comes back and the value aligns with the final purchasing numbers, it’s time to submit the loan for final underwriting approval.
Within 24 hours, you will get word that it has been approved.
Sign closing disclosure
With an approved loan on hand, it’s time to sign the closing disclosure.
This document states when the home will “close” and when the funding will be transferred. It’s typically signed within three days prior to the actual closing date.
Now that everything is nearly finalized, our team will do one last quality control overview to ensure you’re ready to close. You will also need to sign additional paperwork at the title company, which facilitates the closing process.
Set up closing date
The parties will set up a date and time to formally close on the transaction, at which time you officially become a homeowner.