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Mortgage Timeline 101

by Melissa Thompson


Buying your first home, while exciting, is also likely to be the biggest and most complex purchase you will have made up to this point in your life.  But there is no need to let yourself get overwhelmed. Take the time to educate yourself about the process and it will be a lot less stressful.  Let’s start with your mortgage loan.  If you have never acquired one before, you may not realize that from start to finish, it can take from about three to five months to complete the process.  Let’s take a look at the approximate timeline for a mortgage:

  1. FIGURING OUT WHAT YOU CAN AFFORD (TWO WEEKS)

This is the time when you will determine the type of mortgage you will apply for, find out what your credit rating is, and figure out how much you can afford for a monthly payment.While it can probably be done pretty quickly, give yourself about a week so that you can take your time.The second week will be for getting your pre-approval letter. 18 Ways to Check Your Credit Score for Absolutely Free

  1. START YOUR HOME SEARCH/FIND YOUR HOME/MAKE AN OFFER (THREE TO EIGHT WEEKS)

Now, the fun begins! Once you have procured a preapproval, you can start looking for the right home for you and your family. Depending on the market and availability of homes that fall in your price range and appeal to you, this step can go pretty quickly, or it can take a while.Once you’ve found the right home, your Realtor will help you come up with an offer and will submit it to the seller’s agent. Avoid these Seven Mistakes When Making an Offer onHouse

  1. FIND A MORTGAGE LENDER/GET HOME INSPECTION & APPRAISAL (FIVE TO SIX WEEKS)

Once the seller has accepted your offer, it’s time to finalize your mortgage offers and get loan estimates. It’s smart to get rate quotes from at least three lenders so you can compare and find the best one for you. This may take about a week and the appraisal may take three to four weeks. Before you close on your home you need to order a home inspection to ascertain the condition of the home.Your lender will also schedule a home appraisal to confirm the home’s value. The Home Appraisal Process

  1. COMPLETION OF MORTGAGE OVERWRITING AND CLOSING (TWO TO FOUR WEEKS)

If all goes well with the inspection and the appraisal is complete, you are ready to proceed.The mortgage lender will verify your income, assets, debt, and home value details.When all has been cleared to close, you will receive a closing disclosure which will sum up the terms of your loan and what you will owe at closing.You will be given at least three days to review it.Once you’ve determined that everything is as it should be, you are ready to close on your new home! What You Should Expect When Closing on a House

If you are in the market to buy or sell a home in the Memphis area, contact professional Realtor Melissa Thompson and let her help you with all your real estate needs! Give her a call today at 901-729-9526!

Home Closing 101

by Melissa Thompson


Congratulations!  You’ve found your dream home; the inspection has been completed and all your ducks are in a row.  Now your just one more step to get through before you are officially a homeowner.  The closing.  The name sounds ominous, but you don’t have to worry.  If you have everything in order, your home closing should go smoothly.  Here is what you should expect on your big day:

CHOOSE THE RIGHT DATE FOR YOUR CLOSING

When you are thinking about when to schedule your closing, there is a lot to think about. For example, you want to keep in mind that it might take longer than an hour, so don’t try to schedule it on a lunch break from work. Consider taking half a day off or even just a few hours at the end of the day so that you will have plenty of time and won’t feel rushed.  In addition, you will want to think about what time of month you want to close.  Many people want to close as close to the end of the month as possible to save on up-front cash because the later you close, the less interest is owed to the lender.  However, closing late in the month has its disadvantages too. Because so many people are doing it, everyone is rushed -  from escrow companies, to appraisers, to surveyors, to insurance agents and even lender. They are all pushing to get a lot of work done in a short period of time.  And when people are rushed, mistakes are made.  Also, the later in the month you close, the sooner your first full mortgage payment will be due. So, you will want to keep all that in mind when deciding on your closing date. Closing Early Has Its Advantages

DO A FINAL WALK-THROUGH

Buyers are usually allowed to do a final walk-through before closing.  This isn’t a Home Inspection. Your home inspection should already be complete by now.  But a final walk-through will allow you to be sure that the property is in good condition and that nothing has changed or been damaged since the last time you saw it.  The final walk-through is generally arranged by your Realtor to happen anywhere from one week to 24 hours prior to closing.  Check the property thoroughly and bring a checklist with you to make sure you don’t miss anything.

Buying a House? Here's Your Final Home Walk-Through Checklist

CLOSING DAY PARTICIPANTS

Not sure who will be present at your closing?  There may be several people there in addition to the home buyers:

  • The seller and their Realtor
  • A representative from the title company
  • Attorneys (yours and your lender’s, if you have one)
  • A closing agent who conducts the meeting
  • Sometimes your lender will be there, but not always

DOCUMENTS

There are lots of documents involved in the mortgage process, and sometimes they can be overwhelming.  The bulk of your closing will be reviewing and signing various documents.  You should bring any documents you have received throughout your home buying process, including proof of home owner’s insurance, a copy of your inspection reports and any other documents your lender requested during the approval process.  Also, be sure to bring a photo id and a cashier’s check or certified check for down payment and closing costs. 

You will also receive many documents the day of your closing. The seller will sign documents that transfer the property ownership to you.  You will also get documents that pertain to your mortgage agreement and property ownership. 

Real estate transfer documents include:

  • A deed, which transfers the property from seller to buyer
  • A bill of sale
  • Transfer tax declarations

Mortgage loan documents include:

  • A mortgage note, which is your promise to repay the lender
  • A mortgage agreement that puts the property as collateral in case you can’t repay your loan
  • A loan application to review for accuracy
  • A loan estimate and closing disclosure

It’s vital for you to have an understanding of your closing documents prior to your closing so that you will understand what you are reading and signing.  Review them ahead of time and you will be ready to go on closing day.

Once you have reviewed and signed all the necessary documents, you will receive your keys and officially be a home owner. That’s another reason to take time off work…because now it’s time to celebrate!!

If you are in the market to buy or sell a home in the Memphis area, contact professional Realtor, Melissa Thompson, and let her help you with all your real estate needs. Give her a call at 901-729-9526 today!

Photo Credit: realtor.com

Homeowner’s Insurance: The Basics

by Melissa Thompson

Becoming a homeowner for the first time can seem like a daunting task. There are so many details and many first-time homebuyers don’t know all the ins and outs of homeownership. It’s important to educate yourself and be prepared for what’s to come.  One aspect of being a homeowner is paying homeowner’s insurance. 

To understand how you pay for homeowner’s insurance, you need to understand your monthly mortgage payment and how it breaks down.  There are four parts to you mortgage payment: PITI.  This stands for principal, interest, taxes and insurance.  The insurance part of your payment can vary depending upon your loan type.  There are some insurances that are required when you obtain a mortgage, and others that are not.  It’s up to you to decide what you need and to do so, you need to understand what they cover.

Private Mortgage Insurance (PMI) will usually be required if you are putting down less that 20% on your home purchase.  But not all loans require PMI.  For example, a VA Loan does not require the borrower to pay PMI. It is replaced by an upfront VA Funding Fee.  Even if you are required to purchase PMI, once you have 20% equity in your home, it can be dropped.

Homeowners insurance is another requirement of getting a mortgage loan.  This is the insurance that protects your home in the event of fire, theft, or damage.  Depending on the insurance you choose, you may be covered for things like stolen jewelry and stolen or damaged electronics and/or furniture.  You must be able to provide proof of insurance to your lender before closing on your home.  This insurance not only protects you as the homeowner, but it also protects the lender in case of foreclosure or in the event of a disaster.  It is common for the lender to require you have at least enough insurance to cover the cost of rebuilding the home.

Another requirement is that you purchase Title Insurance.  This insurance protects you by providing proof of legal ownership should someone else try to claim ownership of the property.  Should a title dispute arise resulting from a sale, the title insurance may be responsible for paying specific legal damages, depending on the policy you have.

There are additional insurances that are not required by your lender, but you may want to consider them for more protection.  Personal property insurance may cover personal belongings that your homeowner’s insurance does not cover, like art, collectibles, and firearms.  A home warranty is not insurance, but does offer further protection should something break. For example, you might want a home warranty for your HVAC system to cover the cost of service should it need repairs.  Purchasing additional insurance or a home warranty is a personal choice. You can talk to your mortgage banker and insurance agent regarding your options.

If you are interested in purchasing a home, the professionals at Your Key to Memphis can help you find your dream home and answer any questions you may have.  Contact Melissa Thompson and her team at 901-756-8900 or 901-729-9526 and start your home search today!

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