Having knowledge and experience are probably the most important factors to a successful real estate transaction. As your agent, I can provide you with a lot of valuable information. This, combined with my expertise, experience and training, can be very important to your success throughout the Houston Home buying experience.
One of the keys to making the home buying process smooth, understandable, and less stressful is planning. This will allow you to anticipate requests from lenders, lawyers and a host of other professionals. Furthermore, working close with your Houston Realtor and planning will help you find valuable shortcuts in the home buying process.
12 Steps to Houston Home Buying
1. Find a lender. Ask family, friends or co-workers fo references; speak with local real estate agents; search the Internet. I can also offer you some lenders I have worked with in the past or who have a good reputation among my fellow agents. The lender you choose could potentially make a difference between in regards to the time it may take to process. It could also make a difference in the fees they charge.
2. Fill out a loan application.
3. Get an estimate of closing costs from the lender you choose. The lender is legally required to provide you with an estimate of closing statement within three days of receiving your loan application. Ask your lender what type of loan program your lender they have selected for you, including the rates, terms and any special information, such as prepayment penalties.
4. If you are working with more than one lender, compare costs, fees and terms of loans. I strongly recommend that you speak to more than one lender to give you peace of mind comfort that you are getting the best possible
5. Negotiate fees. Sometimes you can negotiate the amount of fees or loan points (a point is equal to 1% of the loan amount) the lender charges you.
6. Consider lowering your interest rate by paying more points. The relationship of interest rate to points paid is an inverse one; the more points you pay, the lower the interest rate. If your down payment is at least 20% of the cost of the home you will not be required to pay a monthly PMI (private mortgage insurance) fee. PMI is extra insurance that lenders require homeowners to have if the loan is more than 80% of the home’s value. Private mortgage insurance only protects the lender against a borrowers default and it enables a borrower with less cash to have access to homeownership.
7. Provide required documentation.
8. The lender may require the appraisal fee or processing fee to be paid up front. The appraisal fee usually cost from $300 – $450. If not required up front it will be included on the HUD-1 Statement. The HUD-1 is a form used by the title company to itemize all charges billed to a borrower and seller for a real estate transaction. It is a detailed list of all incoming and outgoing funds for each party.
9. Review loan papers. RESPA (Real Estate Settlement Procedure Act) requires you be given a copy of the HUD-1 settlement statement at least one day prior to closing so that you may review before closing day. It is a good idea to meet with your agent either in person or by phone to go over the HUD – 1 to make sure the loan matches the original quote you were given.
10. Meet with your lender to sign your loan papers and your down payment funds into your account four to six days before you are scheduled to close.
11. Bring a cashier’s check for the down payment to the title company on the day of closing. The lender sends a check for the loan amount to the title company.
12. Get ready to congratulate yourself! Once you have signed off on all contingencies, and you receive a copy for the deed and a set of keys; you will own the home!