Purchasing a home can be both an exciting and overwhelming experience. Buying a home means taking a look forward and determining what kind of home will best suit your family for the foreseeable future. From explaining the steps of buying a home, to looking at different types of loans you may be able to take advantage of, to making sure you understand all the lingo, I’m here to make sure your home buying process goes smoothly, whether it’s your first home or fifteenth.
First things first, order a free credit report online to make sure there is not something reporting on your credit that shouldn’t be. Potential lenders will be taking a close look at your credit history, and checking your report to make sure there are no errors can save you some trouble down the road.
Next, work on getting a pre-approval letter from a lender. A pre-approval letter states that you are approved to spend up to a certain amount on a home, signaling to sellers that your offer is good and is likely to go through. A pre-approval letter can be the determining factor between your offer and another buyer’s, so it’s a must have to make sure your dream home doesn’t slip through your grasp. A pre-approval letter doesn’t lock you in with a specific lender, so you are still welcome to shop rates once you have found your new home. Don’t worry about it dinging your credit, there is a 30 day window! (Check out my preferred vendor list below on this page, or on my resources tab!)
Before you start looking, determine what kind of budget you’re comfortable spending on a home. Just because you’re pre-approved for a larger amount doesn’t mean you should spend it all, and knowing what you’d like to spend a month on a mortgage ensures you are looking at homes that are comfortably in your price range. Ideally you want to be able to pay off your home in 15 years or less so that you don’t pay a lot of extra interest, but your lender can extend out as far as 30 years. Ask your lender to show you all of your options and the bottom line paid on each to better understand what you can/are willing to pay for your dream home.
Before you start looking at houses, it’s a good idea to determine what the needs and wants in your home search are. Location, school district, size, and number of bedrooms/bathrooms can be some necessities you need to take into account, while an updated kitchen, swimming pool, or extra garage space may get added to your wish list. It is important to consider what things are the most important on the front end vs. things you could potentially add or change down the road. For example, you can’t change the location of your home and may not be able to extend your lot size, but you could renovate the kitchen later.
Figure out what things for you are non-negotiables, as well as things that are on your wish list, and don’t be shy about communicating those. If you know that there’s absolutely no way that anything less than three bedrooms is going to work for your family, or that the wooded lot behind a house is going to give you the creeps, communicate that. There’s no reason to waste time looking at houses that aren’t for you.
Your Realtor® is going to be your lifeline while buying a home, and it’s important to make sure you find the right one. Interviewing and checking reviews online can help you find the right fit for you. This is one of the largest investments you will ever make, you need someone who you’ll get along with and feel comfortable confiding in to help you with the process. Your Realtor® is going to be searching for homes for you to choose from, helping you find lenders and contractor vendors, getting answers to questions, and supporting you through this entire process, so it’s important that you trust them.
Two terms that often get tossed around interchangeably are “Realtor®” and real estate agent. Although both a Realtor® and a real estate agent are qualified to help buy and sell property, a Realtor® is registered to the National Association of Realtors® and held to a higher ethical standard. Realtors® must abide by a stricter set of rules, meaning that they will go out of their way to protect your interests.
As your Realtor®, as well as your Buyers Representative, it is my goal to act on your behalf and work to obtain the home you desire with as little drama as possible. Real estate purchasing is not always a cut and dry process. I will be your negotiator, your advisor, and if we run into issues, I will direct you to those that can help complete the transaction. Finding a home is just the beginning of the process, and I’m here to make sure it goes as smoothly and enjoyably as possible.
Once you’ve decided to work with me, it’s time for the fun part – looking at homes! Share with me what your most important needs and wants are, and if there are any specific homes you want to see, let’s do that first. Remember, go into house showings with an open mind – paint colors, light fixtures, and decorations can be changed. Things that are most critical of are the things you can’t change – the school district, neighborhood, floor plan, bedroom and lot sizes. I’m there to help answer questions and offer additional insights about the home and neighborhood, so feel free to voice any concerns or questions. I can also reach out to the seller’s agent to get more details on the home and answers to any questions about its history or functionality. Don’t be shy – this is your future home we’re talking about.
When you’re looking at homes, try to picture your family living in the space to determine if it’s the right fit for you. Consider the way you live (or want to live), and any future plans that might require extra bedrooms, the addition of a pool, and other wish list items that were discussed before you started your search.
After looking at a few (or a few dozen) homes, hopefully you have found the one. Once you find the home, it’s time to put in an offer. I will assist you with what an appropriate offer may be based on recent sales in the area, although the decision is ultimately yours, you need to consider things like time on the market, competition for the home, and current market trends. Your offer will normally address the price you want to pay, a closing date, appliances you want to stay or removed from the home, as well as things such a home warranty, contingencies such as loan approval, passing an inspection and appraisal. The seller may accept your offer, reject your offer or counter with another option. I will keep you informed of all negotiations and communication regarding the purchase of your home, and will help you walk through this process. You and the seller will continue exchanging offers through your agents until you come to an agreement (or don’t and one party decides to walk away). If you are able to come to an agreement, it’s time to get excited – but only briefly, because now is when the paperwork begins!
Once the offer is accepted, it’s time for us to get to work! First things first, you will need to quickly get an earnest money check in to the brokerage to secure your deal. I will be able to offer more details about the earnest check when preparing your offer, but it is normally a percentage of the asking price that goes into escrow until closing.
You will want to get final rates from lenders and make a decision on who you want to go with, as you will need to start moving forward on the paperwork to be able to close in time. Your loan officer will be working very closely with you over the next few weeks to get all the documents submitted to underwriting, and I will be communicating with them to make sure we are all on schedule. Also, you will need to decide which insurance company you want to use for your new home and send that information over to your lender.
The biggest thing to remember during this time is to be responsive to phone calls, e-mails, and text messages. It is your duty to “act in good faith” throughout the process. Your lender and I will both do everything we can to help you, but will need your cooperation in providing important information and documents in a timely manner. A lack of communication can ruin a good real estate deal and cause expensive delays.
You will also want to move forward with your home inspection once an offer is accepted. Home inspectors are typically booked several days ahead, and their report can take a day or two to complete after the inspection is done. You’ll want to make sure there are no major issues with the home before you pay any more expenses associated with the purchase. Also, getting the home inspection done early allows time for negotiations for any necessary repairs on the seller’s part, and prevents delays in closing. The home inspector you use is your choice, and normally is paid for by the buyer (you), as well as any other inspections you request: termite, water tests, air quality tests, roof inspections, HVAC inspections and radon to name a few. (For a list of great inspectors, check out my resources tab!)
Another thing you will need to complete prior to closing is a home appraisal, in which a licensed appraiser comes out to assess the value of your potential new home based on it’s condition, location, features, and a comparison with other homes that have recently sold in the area. The home appraisal is ordered by your lender and its purpose is to assure your lender that your home is a good investment and worth the amount of money they are loaning you.
After submitting all of your necessary documents to your lender, working through inspections and receiving the appraisal, you will be anxious to get into your new home. It seems like a long time from this point until you take possession, and can be difficult to “hurry up and wait” but there are wheels turning in the background (title searches, insurance photos etc.).
As you approach the closing date, you will need to do a final walk-through on the home to take a last look at your new house before closing. The purpose is to make sure that any contractual obligations have been met, everything is in working order, and there’s nothing missing that should be there. If possible, it’s best to do the final walk-through after the sellers have moved out so that you can see the condition of the home without being hidden by furniture and decorations. Also, if possible, try to do the final walk-through a day or two prior to closing to make sure that seller has time to address any problems that you may find.
I will provide you with a step-by-step timeline, walk through the steps with you, and help give you direction when you feel lost, so don’t feel overwhelmed, ask!
Once all of the contingencies have been fulfilled and the loan paperwork is complete, as long as everything on the seller’s side is good to go, it is time for closing! Closing is when the deed or title of the new home will be transferred to you, and you will officially take ownership of your new home. All the final details of the loan are wrapped up at closing, and any finances involved will be paid at this time. In our area, closing attorneys handle this process (again, see my resources tab)! It will feel like you are signing your life away, but once closing is over, it is officially time to celebrate!
Several different loan types exist, each with varying requirements for down payments, mortgage insurance, and financial backgrounds. Considering where you are buying your home, how long you plan to live there, and determining what you deem a comfortable monthly payment will help you choose which loan best suits you.
Conventional loans typically require a down payment and have two variables: Length of loan and fixed or adjustable interest rates. Conventional loans are not backed by the government, which means more stringent requirements may be enforced, but you could get better interest rates if you qualify.
15 year mortgages are great for people looking to build equity in a home quickly, will have higher monthly payments but will lead to paying off a home much faster and often have lower interest rates.
30 year mortgages are ideal for people who are planning to stay in their homes for a minimum of 10 years and are looking for a lower monthly payment. 30 year loans are typically set up with you paying large chunks of interest first, meaning it can take longer to build equity in a home and more money for the home in the end.
A fixed rate mortgage means that you will have the same interest rate for the life of the loan, insuring regular monthly payment rates. Fixed-rate loans are predictable and involve less risk.
An adjustable-rate mortgage offers a low starting interest rate for a set amount of time. Once the initial time period is over (often 5-10 years), your interest rate will adjust with market interest rates, going up or down depending on what the market is doing. This means that your monthly payments will also vary.
With a Federal Housing Administration loan, you can put down a reduced down payment (normally as little as 3.5%) and have lower credit scores than some traditional loans might require. FHA loans normally require paying mortgage insurance and are a common choice for first time home buyers. For more information on FHA loans, visit the FHA loan website.
If you have served in the US military, a Veterans’ Affairs loan may be perfect for you. A VA loan requires no down payment and no mortgage insurance requirements, as the government backs the loan. However, VA loans can have more stringent requirements due to their government backing and the property must meet several requirements. For more information on VA loans, please visit the website VA housing assistance website.
If you are wanting to buy a home in a rural area, you may be eligible for a USDA Rural Development loan. USDA loans are great people struggling to buy a home as there is no down payment required and can offer discounted interests rates. USDA loans will require paying mortgage insurance, and debt to income levels will have more stringent requirements.
The Tennessee Housing Development loan was created to help families with middle to moderate incomes obtain home ownership. THDA loans are great for first time home buyers as they offer down payment assistance and homebuyer education courses. THDA also offers loans for active duty military and veterans through a program they call “Homeownership for the Brave.” For more information on THDA loans, visit the THDA first time homebuyers web page.
Trisha and Stacy at Mortgage Investor’s Group can offer you a full range of options for your home loan and work with you to find the best solution for your financial needs. Mortgage Investor’s Group offers conventional, FHA, VA, USDA, and THDA loans, and works with many first time home buyers as well as repeat buyers. Visit Mortgage Investor’s Group website to get more details about their services.
Call Trisha at 731-300-4300
Karley Bond at Regions Bank helps first time homeowners and repeat buyers find mortgage solutions that work for them, as well as helping with refinance deals. Get more information at the Region’s Bank mortgage website.
Call Karley at 731-506-6470
Tim Sikes at Leader’s Credit Union has a background as a real estate agent, so he understands the perspective of home buyers and common concerns. He’s got nearly a decade as a mortgage originator, and wants to help make sure customers are finding the right home.
For more information on Tim, visit Tim’s Leader’s Credit Union website.
Call Tim at 731-664-1784 extension 1220
Kelly Schmidgall at Leader’s Credit Union has international sales experience and a unique perspective when it comes to meeting customers’ needs while providing them with a loan.
For more information on Kelly, visit Kelly’s Leader’s Credit Union website.
Call Kelly at 731-664-1784 extension 1273
Sheila Greer at First Bank helps match customers with the right loan programs and offers one on one service to her customers. For more information on loans offered at First Bank, visit the First Bank website.
Call Sheila at 731-616-4788
Darnessa Taylor at Simmons Bank is an advisor to Simmons and helps match customers with the perfect home loans for them. To get more information on how to reach Darnessa, visit the Simmons website.
Call Darnessa at 731-984-6308
Bank of Jackson is a full service mortgage lender and can offer help with conventional, VA, FHA, USDA, THDA, and construction loans. Ronnie Smith can help you navigate these programs and determine which may be best for you. For information, visit the Bank of Jackson website.
Call Ronnie Smith at the Bank of Jackson 731-410-8009