The following is a general overview of what you can expect from the day of contract acceptance through the day you will receive the keys to your new home, based on mortgage financing:
- Inspections: This is usually the first step in carrying out the terms of your contract. At this time, you will contact the appropriate inspectors and schedule appointments to have any inspections performed. Once the results of each inspection are received, you will address any concerns with the seller of the property.
- Earnest Money: This is the amount of money you promised the seller to deposit with your broker in “good faith” once your offer was accepted. Your earnest money check should be paid by check or money order, in the amount agreed upon, within the time frame indicated, in the purchase agreement. This payment will be credited towards the purchase price and the amount of funds you will need to bring to your closing.
- Loan Application: Even though you have been preapproved for a mortgage loan, a “formal” loan application with the lender of your choice should be made within the time specified in your contract. At this time, you should bring in all of the documentation your loan officer has asked of you.
- Loan Processing and Document Collection: Once formal loan application is made, your file will move to loan processing. The processor will collect all of the additional information that is needed to complete your loan file and prepare it to be reviewed for loan approval.
- Appraisal: During the processing period, an appraisal of the property will be performed to validate the amount of the purchase price listed on the contract. This is done to show the lender that the money they will be lending you is supported by the value of your home.
- Title Exam: Also during the processing period, an examination of title is performed by the title company agreed upon in the contract. They are the neutral third party who assists in the closing process, and it is their job to ensure that the property is free and clear of all liens and encumbrances prior to transferring a property to a new owner.
- Insurance: You should contact your insurance agent during the loan process to get quotes on homeowner’s insurance premiums. Your lender will require hazard insurance in order for you to purchase the property.
- Underwriting: Once all of the required loan documentation is collected in processing, the file is given to the underwriter for loan approval. It is the underwriter who analyzes all of the information in the file and determines whether a person qualifies for a loan. Once a full approval is given, the file will move to the lender’s closing department to prepare for closing and title transfer.
- Final Walk Through: A final walk through of the property with your agent will allow you to view the property and check any repairs that have been made during the process, and to confirm that the property is in the same condition now that it was when you made your offer. This is typically done before your closing appointment.
- Closing: The “closing” date is the day you actually sign your closing documents and loan papers.
- Utility Transfer: Utilities are generally set up for service based on the possession date.
- Title Transfer: This is the day the deed is recorded and new ownership becomes official.
- Possession: This is the day written in your contract that tells you when you will receive the keys to your new home.
This entire process can take up to an average of 45 days. It is good to keep in mind that all home purchases have many variables that determine the length of the home buying process and that each buyer experience is unique. The Vaccaro Team will be there to assist you every step of the way to ensure that your home buying experience is the best it can be!