The Last Home Buying Checklist You’ll Need
If you’ve made up your mind and decided to buy a home – congratulations – becoming a homeowner has many benefits and is a great investment for your future! You’ll want to start out by getting financially organized and fully understanding the process. There will be a lot of requests from your lender and third parties that will need your full communication and cooperation. Here at Neighborhood Loans, we’ve designed the perfect checklist to help keep you on track from start to finish.
Getting financial organized is crucial before you start steeking out lenders, real estate agents, and homes. Below will be a list of the documents you need and tasks to complete before getting pre-approved with a lender. Getting these documents together will allow you to estimate the value of the home you can afford monthly. Receiving a pre-qualification and pre-approval from a lender will allow you to shop for a home with confidence and make strong certified offers.
- Create a monthly spending spreadsheet to figure out how much you can afford monthly.
- Check your credit score and print a copy of the report.
- Calculate your Debt-to-Income (DTI) ratio ([Monthly Debt Payments / Monthly Gross Incoming] x 100 = DTI%)
- Allocate funds for the down payment.
- Consider talking to multiple lenders (comparing terms across at least two different lenders is important).
Documents that will be Requested by your Lender
- Last two years of tax returns (business owners will need additional documents)
- Last two years of W2’s or 1099’s.
- Recent bank statements.
- Documentation of any gift funds.
- Proof of alimony or child support payments (if necessary)
- Any documents relating to pension, social security, or disability income (if necessary).
- Any other documentation requested by your lender. They may require letters of explanation or other documents to approve your loan.
Once you’ve been pre-approved by a lender, it’s time to hire a real estate agent and start shopping for your dream home. Working with a real estate agent gives you access to the tools and resources that make finding the perfect home for you easy. Here are some points that might help you with your agent and home search.
Working with a Real Estate Agent
- Research different agents online to find the right one for you.
- Talk with at least two agents to learn about their background and rates.
- Once you find a real estate agent, they’ll start the process of finding homes to show you.
- Ask questions and take advantage of the tools and resources agents have.
- Come up with a list of questions to ask each seller as you walk through the homes.
Finding a Home
- Write down your needs and wants before you start looking (so you can share them with your agent).
- Research the neighborhood and area you will be moving to.
- Take note of the school districts and other town amenities.
- Figure out potential new commuting times.
- Test the electrical, plumbing, windows, garage, and any other appliances currently in the home.
While an appraisal will be required by your lender – a home inspection isn’t always a condition to secure funding. Getting the home inspected by a professional will help you avoid purchasing a faulty home. Appraisers only look at a certain set of requirements to value the home – and don’t thoroughly inspect it. Working with a third party to get the home inspected will pay off in the long run – if they find any issues – the seller will be required to fix them or adjust the sale amount. Finding these things before you make an offer is crucial.
Now that you’ve found the perfect home – it’s time to make an offer and secure funding with your lender.
Making An Offer
- Work with your real estate agent to make a competitive offer that is within your pre-approved amount.
- Negotiate the terms of your purchase agreement with the help of your agent.
- Sign the purchase agreement to confirm the deal is in place.
- Get the property formally inspected by a professional.
- Go back to your lender with the documents (mentioned above) that you previously organized.
- Upload or give them all the aforementioned documents to start the processing and underwriting of your loan.
- Meet any conditions requested by the lender (ex: letters of explanation, additional verification, etc.…)
- Confirm the appraisal is completed and that the value of the property matches your loan amount.
- Your lender will prepare the title documents, verify your insurance and employment, and send you a closing disclosure during this time.
- Sign your closing disclosure to confirm the closing costs.
- Keep in good communication and respond to any other requests from your lender.
Now that you’ve met all the lenders’ required conditions – you’ll be ready to take the next step and close on the home! Congratulations on making it through the majority of the home buying process – last up is closing day.
- Show up on the coordinated closing date to sign the final documents.
- Pay all closing costs.
- Sign and notarize all county and state documents to complete transfer of ownership.
- Record your purchase with the county.
- Take the new keys to your home and prepare to move in!
Becoming a homeowner will come with a lot of new responsibilities. Remember to make your payments on time each month and properly take care of your home. Get to know your new community and start building relationships with those around you.
If you have any questions or need help with any of the steps on this checklist – reach out to Neighborhood Loans – we have qualified professionals to help you every step of the way. To learn more about us – visit us online at – www.neighborhoodloans.com