Pierre C. Rumpf's Blog
If you’re a first-time buyer, odds are you’ve never seen or heard much about mortgage applications. However, for something as important as buying a home, it pays off to go into the process knowing what to expect.
Mortgage applications aren’t all that complicated in and of themselves. Most of the time, your chosen lender will walk you through the process and answer any questions that arise. However, complications do arise when it comes time to provide documentation on things like your income.
To make things easier for your first application, I’ve put together this list of frequently asked questions that first-time buyers often have about their mortgage application process.
Will applying for a mortgage hurt my credit score?
Mortgage lenders will run a credit inquiry to help determine your lending eligibility. There are two types of credit inquiries: hard and soft. A soft inquiry is a quick credit check that doesn’t affect your credit score. A hard inquiry, on the other hand, does. This means your score will be lowered slightly for a few months and then will bounce back.
Mortgage lenders run both types of inquiries. For quick, pre-qualifications, lenders typically run a soft inquiry. Then, as you progress through the approval process, they’re run a detailed credit report (hard inquiry).
What information should I have available?
Lenders will ask you for various documents. The most common things they will ask for include proof of income in the form of W-2 forms from the previous year and your most recent pay stub. They will also require a record of your other debts, including student loans, auto loans, credit card debt, and any other outstanding debt that you owe. Finally, they will ask for an inventory of your assets. This could include investments, properties, auto titles, and more.
What if I don’t work a conventional job?
People who are self-employed or have unconventional income can still qualify for a loan and will still be required to show proof of income. Lenders may ask for Form 1099 records, tax returns, or any other record or proof of income you have available.
How long does it take to complete an application?
Mortgage applications can be completed as quickly as you gather the required documentation. However, there’s more to getting approved for a mortgage than filling out an application. There will be time needed to process the application, and underwrite your mortgage. This entire process typically takes between 30 and 45 days.
Is it safe to apply for a mortgage online?
Most lenders allow you to start the application process online and their online portals are typically secure. Make sure you check your browser window to ensure that the connection to the site is secured, and you should have nothing to worry about.
Keep in mind that most online applications are designed to get you prequalified and on your way to getting a mortgage. So, if you want to avoid getting calls from the lender, you might not want to enter any data until you know you’re interested in borrowing at this time.
Want to buy a house? If you plan ahead for the homebuying journey, you may be better equipped than ever before to reap the benefits of a seamless homebuying experience.
Now, let's take a look at three tips to help you prepare for the homebuying journey.
1. Figure Out Where You Want to Live
Do you prefer the hustle and bustle of the big city? Or, would you like to reside in a small town? Think about where you want to live, and you may be able to speed up the homebuying journey.
A homebuyer who narrows his or her search to houses in a set number of cities and towns may be able to quickly discover the ideal residence. Thus, if you know where you want to go, you can act fast to pursue your dream house. And once you find your dream home, it may be only a few weeks before you can finalize a home sale.
2. Obtain a Mortgage
A mortgage generally is a must-have for a homebuyer, regardless of where he or she decides to live. If you submit a mortgage application before you embark on the homebuying journey, you can enter the real estate market with a budget in hand.
Oftentimes, it won't take long to get pre-approved for a mortgage. You can meet with a variety of banks and credit unions, and these financial institutions can teach you about a wide array of mortgage options. Next, you can select a mortgage that satisfies your personal requirements.
When you meet with banks and credit unions, don't hesitate to ask plenty of questions, either. If you receive expert mortgage insights, you can make an informed mortgage decision that likely will serve you well for years to come.
3. Consult with a Real Estate Agent
Let's face it – pursuing a home should be a quick, easy process, but problems may arise that prevent you from buying your ideal residence. Thankfully, real estate agents are available in cities and towns nationwide, and these housing market professionals can help you make your homeownership dreams come true.
A real estate agent is a housing market expert who can teach you how to discover a terrific house at a budget-friendly price. This housing market professional can explain the differences between a buyer's and seller's market and help you map out a successful homebuying journey. That way, you may be able to improve your chances of acquiring a superb residence if you hire a reliable real estate agent.
In addition, a real estate agent will serve as your guide along the homebuying journey. He or she will keep you up to date about new residences that become available, set up home showings and help you submit homebuying proposals. And if you ever have homebuying concerns or questions, a real estate agent is available to respond to them.
Achieve the best-possible results during the homebuying journey – use the aforementioned tips, and you can plan ahead to acquire your ideal residence.
Looking to buy a house without having to break your budget? Put together a homebuying roadmap, and you can increase your chances of finding a top-notch house that falls within your price range.
Ultimately, there are many things to consider as you put together a homebuying roadmap, such as:
1. Your Dream Home Definition
Differentiate your dream home must-haves from your wants – you'll be glad you did. If you can determine exactly what you want to find in your dream house, you can narrow your home search accordingly.
For example, if you need a home with multiple bedrooms to accommodate your entire family, you should include this information near the top of your homebuying roadmap. You then can kick off a search of multi-bedroom homes and move closer to finding your ideal residence.
2. Where You Want to Live
Do you enjoy life in the big city? Or, would you prefer to settle down in a small town? Think about where you would like to call home so that you can effectively plan your homebuying journey.
Ideally, you should try to refine your home search to a small collection of cities and towns. This will enable you to speed up your home search and ensure you can find a house that suits you perfectly.
Keep in mind your day-to-day activities as you consider where you want to live too. For instance, if you work in the city, you may want to pursue houses in or near the city itself. On the other hand, you may be able to purchase a small town home for less than what you would have to pay for a city residence and commute into the city for work.
3. Your Homebuying Timeline
Determine how quickly you'd like to finalize a home purchase. That way, you can map out exactly how you want to approach the housing market.
If you are committed to buying a house as soon as possible, you'll need to be proactive. The top houses sell quickly, and if you don't act fast, you risk missing out on your dream residence to a rival homebuyer.
Conversely, if you can afford to be patient, you can avoid pressure throughout the homebuying process. In this scenario, you can pursue houses at your convenience. And once you find the right home, you can submit an offer and finalize your home purchase.
When it comes to creating a homebuying roadmap, it generally helps to get support from a real estate agent. In fact, this housing market professional can provide plenty of assistance throughout the homebuying journey.
A real estate agent will learn about your homebuying goals and help you develop a successful homebuying roadmap. Furthermore, he or she can keep you up to date about new homes as they become available and make it easy to discover a wonderful residence at a budget-friendly price.
Ready to get started on the process of purchasing a house? Consider the aforementioned items as you create a homebuying roadmap, and you can plan a successful homebuying journey.
Moving into a new home can be overwhelming. Once you have gone through the long process of buying a home, when the keys are your hand, your mind could be swirling with tons of ideas for what you should do in your new space. There are a few important things that you need to complete before you get into painting those walls or buying a new sofa. Read on for tips.
Look At Your Things
In the excitement of moving, you may forget about all of the stuff that you actually moved into the home. If you hired movers, check your boxes. Make sure that nothing is broken or damaged from the move. If there is anything wrong, you can file a complaint with your moving company.
Turn The Utilities On
The utilities need to be turned over to you from the previous owner. In many cases, you’ll need to contact the local utility companies in order to get the bills switched to your name and the services started. This is important for you to have a completely functioning household. Cable and Internet is a choice provider that you’ll also need to set up ahead of time before your move.
Unpack Your Stuff
Rome wasn’t built in a day but you need certain things like clothes and coffee makers as soon as you move into a space. Find the boxes that have the most important things in them like sheets, blankets, clothing, and important appliances. Work your way out. You don’t want your new home to stay a complete disaster zone forever.
Organize Your Stuff
Moving into a new home gives you a new opportunity to get organized. Get everything in order the first time. This will keep you from needing to clean up constantly at a later date. When you start off with good organization you’ll be a lot happier in your new home.
Make sure that your new home is secure for your family. Think of everything from accidents to crime. Install an alarm system. Change the locks. Inspect the property for any hazards. All of these activities can help to make your new home a more secure place to live.
Learn About Your New Surroundings
When you move into a new neighborhood, you should take the time to get to know the area. This includes meeting your neighbors and taking a stroll around your neighborhood to see the area more closely. Discover the highlights of the area like restaurants, shops, and other activities. Enjoy the new place that you call home to the fullest!
When a house is sold, it’s generally expected that the seller will take all of their personal belongings along with them. This includes furniture, pictures, cleaning supplies, and appliances that weren’t included on the deal. This is all in the expectation that the buyer will have a clean property to move into.
If a seller does leave personal property behind, what are the rights of the buyer? Buyers may wonder if they can move in and actually take possession of the home if belongings have been left behind. There are a few reasons that buyers may leave property behind including:
- The item is actually a fixture and not considered personal property
- The item could belong to a tenant (or former tenant)
In these circumstances, each state determines different rights and procedures that must happen in order for the property to be secured without hassle by the buying party.
What If There’s So Much Stuff It Impedes On Moving In?
In the case that a seller has left so many things that a buyer cannot even comfortably move into the property, the contract may be refused. If there’s an inordinate amount of furniture, trash, and personal belongings, you certainly have a good argument to not sign the final contract for the property. Your rights as a buyer do, however, depend on what exactly was written into the purchase contract for the home you’re buying.
If an item has been deemed hidden or buried, the buyers have a different circumstance on their hands. Many times, a buyer is obligated to hang onto these items for the seller. The items were not technically abandoned by the seller to the buyer. The buyer becomes what is called a “bailor,” or a keeper of the property, who needs to be an agent in the change of possession of the items.
If the ownership of an item is unknown, the terms of the contract are held up. Standard contracts generally state that any items left behind by the seller have been forfeited to the buyer. If the contract says nothing about personal property, the buyer generally takes on the role of “bailor” again in this instance.
If The Property Owner Has Died Or The Property Has Been Abandoned
If a property has been abandoned due to foreclosure or bankruptcy, or the property owner has died, any personal property that is left behind is a bit more of a risk for both parties. These circumstances generally state that a buyer will be taking on a property “as is” and essentially anything left is the buyer’s problem.
If a property owner has died, the executors generally take on the responsibility of removing items from the property to be distributed to the rightful beneficiaries. Occasionally, this process doesn’t work out due to family quarrels. In this case, personal property of the seller goes into the category of forfeiture.
Personal property is just one reason why you need to understand your legal rights when you’re buying a home.