Delaware First Time Home Buyer Tips – Loan Process for Home Purchase

Here is a Step-by-Step Guide to the Loan Process for purchasing a home from start to finish:

1. Pre-approval – Get pre-approved for a mortgage and know in advance exactly how much house you can afford. Completing this step will also increase your negotiating power since you’ll be viewed as a “cash buyer”.  This includes having a credit report pulled to verify you credit qualify for a loan.

2. Loan Search – Put yourself in the hands of an experienced mortgage professional, someone who will help you to determine which financing options best suit your needs today and in the future. You can also explore down payment assistance options.

3. Loan Application – It’s crucial to supply the lender with as much information as possible, as accurately as possible. All outstanding debts as well as assets and income should be included.

4. Documentation – Paperwork supporting the application must also be submitted. Information commonly sought includes pay stubs, two years’ tax returns, and 2 months of bank account statements verifying the source of the down payment, funds to close and reserves.

5. Real Estate Agent – Once you are pre-approved you will then need to get a Buyer’s Agent that will work for you exclusively to find a house and negotiate on your behalf. If you need a recommendation for a great Real Estate Agent, let me know and I can recommend one.

6. Shopping for a Home – Begin shopping for a house. Once you find the right one, the terms of the sale will be negotiated, including the price and potentially the terms of the loan being sought. Once your contract is accepted, your deposit check will be cashed and put into an escrow account.

7. Appraisal – Lenders require an appraisal on all home sales. By knowing the true value of the home, the borrower is protected from overpaying.

8. Title Search – This is the time when any liens against the property are discovered. A lien may have been placed on a property to ensure payment of outstanding debts by the owner. All liens must be cleared before a transaction can be completed.

9. Inspections – When you purchase a home it is recommended you get a home inspection and a pest inspection done to see if there is anything wrong with the house that you didn’t see.  Government loans will require at least a pest inspection be done.

10. Processor’s Review – All pertinent information will be packaged by your mortgage professional and sent to the lending underwriter, including any explanations that may be needed, such as reasons for derogatory credit.

11. Underwriter’s Review – Based on the information put together by your certified mortgage planner, the underwriter makes the final decision regarding whether a loan is approved.

12. Mortgage Insurance – Many lenders require private mortgage insurance when borrowers put down less than 20 percent on a loan.

13. Approval, Denial or Counter Offer – Once the underwriter reviews a file they will issue an approval, a denial or a counter offer with different terms. If the loan is approved then a mortgage commitment letter can be issued.

14. Home Owners Insurance – Lenders require fire and hazard insurance on the replacement value of the structure. Flood insurance will also be required if the property is located in a flood zone.

15. Signing – During this step, final loan and escrow documents are signed at the attorney’s office.

16. Funding – At this point, the lender will send a wire or check for the amount of the loan to the attorney’s office.  Once the attorney receives funds and authorizes disbursement the seller is paid and the keys are handed over.  You leave the attorney’s office with the keys and are now a new homeowner!

If you’d like to learn more, please give me a call at 302-703-0727. I’d be happy to speak with you!

If you would like to apply for a Delaware Home Loan, you can APPLY ONLINE HERE, you can call John R. Thomas at 302-703-0727.

John R. Thomas – NMLS 38783

Certified Mortgage Planner – Primary Residential Mortgage, Inc.

302-703-0727 DE Office / 610-906-3109 PA Office / 410-412-3319 MD Office

248 E Chestnut Hill Rd, Newark, DE 19713