You put in an offer on a property and it has been accepted, but now what? For most buyers, this is just the beginning. There are still many steps before you make it to the closing table.
Unless you are paying cash, the first thing that must be down is the mortgage loan application process. You generally have 5 days to complete your loan application once the contract offer has been accepted. Be prepared to answer and ask many questions. You will also be required to provide documentation. It may include the following paperwork, but is not limited to:
- Last 2 years of tax returns (all schedules included)
- Last 2 years of corporate tax returns (if self-employed)
- Last 2 years of K1s (if self-employed)
- Last 2 years of 1099 (if self-employed)
- Last 2 years of W/2’s
- Last 4 paycheck stubs (no interruptions)
- Last 2 months of bank statements (ALL PAGES) (ALL ACCOUNTS INCLUDING: checking, savings, stocks, 401k, CD, IRA, etc..)
- Copy of driver’s license (all borrowers)
- Copy of social security card (all borrowers)
- Copy of subject property sales contract
- 3-6 months receipt of child support (court ordered)
- Social security and fixed income awards letter
If any other properties owned:
- Most recent mortgage statements for all properties currently financed
- HOA coupon (if applicable)
- Hazard insurance declaration pages
- Flood insurance declaration pages
- Current tax bill
- Leases on all properties currently owned and rented
The home inspection tells you if the home has any issues. It is important to make sure you are aware of any structural issues, repairs and the estimated cost to fix them.
The lender will require the house to be appraised prior to loaning you money. They want to make sure the home is being purchased for fair market value. If the home appraises for less than the purchase price, you will need to either make a greater down payment or negotiate will the seller to lower the price. A home inspection tells you if the home has any unforeseen issues.
Preparing your funds to close
Make sure your funds required for down payment, closing costs and reserves are easily accessible. If you need to pull money out of any investment accounts, keep the paperwork for the transaction to show the lender you liquidated your funds.
Buyer’s pay at least 1 years of homeowner’s insurance upfront prior to closing or through an escrow account. Depending on the location of the home you may also need additional insurance such as flood coverage.
Final walk-through of your new home will occur within 48 hours of closing. This allows you as the buyer to make sure all items per the contract remain and are in acceptable condition.