Purchase a home can both exciting and stressful at the same time. This is especially true for Florida first time home owners that haven’t went through the process yet. In this post we will discuss some steps that buyers can take to insure the process is as stress free as possible. Home buyers that have questions about the Home Buying Process Jacksonville can contact us direct anytime at ph: 800-871-2636
Home Loan Application – Getting pre approved.
It all starts with contacting the Jacksonville mortgage company to discuss loan programs and getting your mortgage pre approval. During the loan pre approval process lenders will want to know a few basic things to start – the city you want to purchase, the property type (single family home, condo, etc) occupancy ( primary, second home or investment) and mortgage type ( FHA, 100% USDA, VA or conventional)
There are many of loans available around Duval County and Jacksonville, so you should talk to detail about this with your loan advisor. The mortgage company will also ask if they can check your credit report. This credit profile report will alert the lender to any credit/financial problems. If you’ve experienced any financial hardships in the past, you should explain that to the lender so they can provide the best solutions for you. Next, the lender will most likely ask you a few questions regarding other things such as employment history, address history, assets/bank savings, marital status, ownership of additional properties, and many other questions to help them determine your ability to repay the mortgage. This is standard procedure in the mortgage process, so please don’t be alarmed. The entire mortgage application process only takes about 30 minutes to complete.
Below is a list of other questions your loan officer may ask during the process:
Are you a first time homeowner?
A first time homeowner has not owned a home in the last 3 years, or is a recently divorced homemaker. Why is this important? Because there are many programs in Jacksonville that require a lower down payment, provide a lower interest rate, or even provide down payment and closing cost assistance to new first time home buyers.
Are you past or present Military?
Plenty of veterans around Duval, Clay and St. Johns County. Many Veterans qualify for a special VA loan that requires no down payment! In most cases, it is easier to qualify for a VA loan when compared to other loan programs. Becoming pre-qualified is an important step in the mortgage process to enable you to get into the right house with the right terms and conditions. Furthermore, getting pre-qualified helps you strengthen your position when negotiating with the seller as they now know that they have a qualified borrower.
Find and home and make an offer
Now you have found the perfect property you want and you are ready to make an offer. You must consider what sales price to offer, terms, seller concessions, earnest money, option fee, as well as closing and possession dates.
If you are in a sellers market, you will be able to negotiate very little. If you are in a buyer’s market, you will be able to get several concessions from the seller. It really just depends on the market you are located in. This is a process that can be best accomplished with the help of a competent and trusted Realtor. The Realtor is also very important because they should always have your best interests in mind when negotiating with the seller. This allows them to stay objective throughout the process even when you become emotionally involved.
Acceptance of the bid or offer
Acceptance occurs when all parties agree to the price and terms of the contract. At that time, the clock starts ticking to adhere to all details that are outlined in your transaction, home inspection time, appraisal time, etc. You should be sure that all changes are initialed, no matter how insignificant you feel the change is. Absolute agreement and clarity is the key to protecting your rights and expectations for your purchase. This process is stipulated in your contract and should not be more than five days total from the time you submit the offer to the seller. It is important that this process moves along quickly. Once acceptance occurs, the next few weeks are filled with inspections, appraisals, and many other deadlines that you will need to meet to ensure a smooth closing.
Meeting All Deadlines – Below is list of some of the things that will happen during this time period.
After all parties have agreed to the terms of the contract and the executed date is filled in, a copy of the contract and the earnest money must be delivered to the title company. The title company, a disinterested third party, must remain neutral throughout the transaction. They will carry out all the instructions of your contract and provide the title insurance. The address of the title company chosen will be on your contract, so you can communicate freely with them. Generally, your real estate agent will contact the title company for all key factors and they will review your final figures before closing. A good real estate agent can review the HUD-1 (settlement statement) and make sure you have not been incorrectly charged.
General Home Inspection
You have the right to do inspections any time prior to closing. Many homebuyers choose to get the property inspected during the option period. In case there are problems found, the buyer can terminate the contract. The option period begins on the executed date of the contract and normally lasts from 7 to 14 days.
If you feel there is a major item that must be addressed after the general inspection is done, your options are:
- Terminate the contract within the option period.
- Propose a lower sales price.
- Request the seller do the named repairs.
- Split the cost of repairs with the seller.
This is when a great Realtor comes in handy.
WDO (Termite) Inspection
If you are getting a loan, a wood destroying insect report may be required before closing. This report is filled out by a specially licensed inspector and is often done at the time of the general inspection to keep inspection costs down. If you order the general inspection with the termite inspection at the same time, you’ll most likely save yourself a trip charge. This inspection report states if there is a current infestation, there has been infestation, there are conducive conditions (areas that might attract), or the property has been treated. Please keep in mind that infestation in general is easily treatable.
The appraisal is required by the lender to insure the property’s market value and to certify the property meets required standards. Two important areas to focus on are the appraiser’s value and the lender-required repairs. Although the appraisal belongs to the lender, you typically pay the cost as required by the lender. The law entitles you to a copy of the appraisal before closing.
After the underwriter has reviewed your file, they will approve and send it to the closing department. Loan approval is the full and final approval to get your property closed. Sometimes the loan approval is conditional and you must provide documented proof that either your previous home has closed or a receipt of a paid account. Either way, the loan approval moves you one step closer to owning your property. One major factor that lenders consider when approving your loan is your credit profile.
All repairs are generally done after the loan approval. Sometimes a seller might agree to do them early, but don’t expect this until you have been completely approved for the loan. Repairs include lender-required repairs that must be done prior to the funding of the loan. Lender required repairs take precedence over all repairs, because the loan will not be approved unless they have been completed. Although the required repairs discussed are addressed in the contract, repairs that are needed after you are a homeowner should be a concern to you. Good real estate consultants should always recommend a residential contract to protect you in the coming year.
Re-Inspection if needed
After repairs are done, it is always recommended to re-inspect the property. This is often required by the lender as well if the repairs are lender required. Most the time the general inspector you originally hired will look over the work for a nominal charge. This re-inspection trip should not be skipped. Allow yourself enough time before closing for the re-inspection of items where repairs had been requested.
Before closing on your VA loan you must obtain homeowners insurance. You will need to provide your insurance agent with the address, square footage, and age of the property. Some insurance companies ask for additional information that can be provided by your real estate agent. Your insurance will not go in effect until your loan has closed and funded. Your insurance premium will be included in your closing costs, so make sure you don’t pay for it up front.
The amount of your insurance premium is determined by the type of coverage needed:
- Replacement versus actual cash value of items in your house
- Replacement versus actual cash value of dwelling coverage
- Deductible amount
- Security system, deadbolts and smoke alarms
- Discounts may be given if you use the same insurer for your auto insurance
Please remember that flood and earthquake damage are not covered by a standard homeowner policy. You may need to buy a separate policy to cover those types of risks and is depended on the likelihood of occurrence in your area. Flood insurance may be a good idea in Florida, Earthquakes are not likely.
A survey will provide a graphic account of the property you are purchasing. It will show the structure fence line, boundary lines, encroachments, and easements of the property. The buyer customarily pays for the survey, but the cost can be negotiated if the property includes acreage.
During these final few days you will need to finish up any last minute details to ensure that you get the keys to your house the day of closing. This is an exciting time, so try to relax and enjoy the process knowing that your new house is just around the corner. Below are a few last minute things that you will encounter.
Closing time is the date and time set-aside for you to come in and sign the paperwork. Your real estate agent will coordinate the time and date convenient for you and the title company. As a buyer, you may want to close near the end of the month, so that you will minimize the number of days you must pay pre-paid interest. The other consideration is that most closings are scheduled for the last day of the month. A wiser strategy might be to close three days prior to the end of the month.
Funding occurs when all papers have been signed and all conditions have been met. Funding may occur on the day of the closing or on the next day. Careful planning will ensure that all expectations have been met. You will not receive the keys for the premises until the loan has funded, so plan to close early when there are definite time constraints.
After closing, your real estate consultant will give you the keys to the property and you will officially own your new home. Now just try to find some strong friends to help you move in!
Home buyers around Jacksonville that have questions should submit the “Request Contact” form at the top right side of your screen. Mobile users can find the short Request Contact Form here. Please also be sure to call ph: 800-871-2636 and visit www.FiveStarsMortgage.com for the latest mortgage info.