Tales of a Home Buyer – part 4

Written by Shawn DeVries

After getting the purchase agreement signed I again pulled the needed documents for my Loan Officer.  (Yes, all 4,000 pages because 3 months had passed and updated information was needed.  We really do understand what buyers are feeling.) My information was entered into that program again that analyzes the data and based on preset criteria makes a decision on whether or not to approve my loan.  This “little” program can really freak you out sometimes, and all for no apparent reason.  

Ironically the same feelings can occur when you are refinancing your home.  These transactions are big deals and are a significant portion of your personal financial status.  It is no surprise that a borrower will feel some angst that is in direct proportion to their emotional investment to the home.  Highly emotional people will be highly invested into the process.  (I would like to say at this point that in case you have not guessed, I am a passionate person.  My mom will probably describe me in other words, but let’s not get her anymore involved than she already is, okay?)  Fortunately, these results came back just fine too on my loan.   

The next part was to develop my case in order for my Loan Officer to submit my file to an underwriter.  At this point in the home buying process your lender has gotten to know you fairly well.  They understand your financial situation and know what your goals and dreams are.  At least your lender should want this home for you as badly as you do.  If not, find out why.  The underwriter however does not know you.  All they have in front of them are numbers to compare and analyze.  The documents you submit need to tell your story for you.  Share what you need to support their decision so they see you as a low credit risk. 

Shortly after my offer was accepted and the paperwork fun began, I had a full inspection of the home done.  I was relieved to know there were no major issues to resolve or problems to fix.  For a home that was over 45 years old it was in amazing condition.  Getting an inspection is a crucial step in buying a home.  You want an expert without emotional ties to give you an unbiased opinion of what you are buying.  Follow them on the inspection.  Look at what they are looking at, poke where they poke and ask lots of questions.  A good inspector will tell you what needs attention and what is good with the house.  They should be able to also tell you how serious an issue is.  Telling you your furnace is getting old isn’t very helpful.  Letting you know the average life expectancy of a furnace and verifying the age of your unit is helpful.  Letting you know where your unit is beginning to show signs of wear is also beneficial.  Take good notes while on the inspection, but also get their findings and recommendations in writing.

Title work is another major piece in the process.  The title agent confirms that there are no liens against the property that would prevent the house from being sold.  It also confirms who the rightful owner(s) currently is (are), that property taxes are current, and prepares the paperwork so that there is a smooth transfer of ownership (among many other steps).  Title agents are also a great partner to have when buying a home from a trust (like I did), out of a foreclosure or short sale or any other transaction that may involve a bit more documentation.

The third significant step that happens at this point is having your home appraised.  Your lender wants to know the true market value of the home you are buying.  This doesn’t mean they are checking on how well you negotiated and if you got a good deal.  They are looking to protect their investment in you.  This house will be the collateral on the loan.  A lender does not want to lend more than what the property is worth.

After a slow start in finding my dream home, the loan process went very smoothly.  Supporting financial documents?  Check.  Good inspection?  Check.  Appropriately appraised home?  Check.  Title clear and without liens?  Check and check again.

Tags: appraisal, foreclosure, home inspection, home loan, inspector, liens, Loan officer, property taxes, Shawn DeVries, short sale, title, title agent, title work, trust, underwriting