12 Steps to Finance Your New Home
1. Find a reputable lender. Speak with local real estate agents and ask for a referrals or ask friends, family or co-workers for referrals.
2. Fill out a loan application.
3. Get an estimate of closing costs from the lender you choose. By law, the lender is required to provide this statement to you within 3 days of receiving the loan application. Make sure to ask what type of loan program your lender has selected for you, including the rates, terms, and any special information, such as prepayment penalties.
4. Compare costs, fees, and terms of loans if you are working with more than one lender.
5. Negotiate fees. Sometimes you can negotiate the amount of fees or loan points (a point is 1 percent 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.
7. Provide required documentation requested from your lender as timely as possible.
8. Pay any up-front fees. Sometimes the lender requires that the appraisal, or processing fee be paid at the beginning.
9. Review your loan papers. Approximately one week prior to closing, loan papers will be ready for your review. Make sure the loan matches the original quote you were given.
10. Sign your loan papers and put your down payment funds into your account four to six days prior to closing.
11. Bring a cashier’s check for the down payment to the title company, escrow company or attorney handling the closing. The lender will send the title company a check for the loan amount.
12. Get ready to congratulate yourself! Once the transaction closes and you have signed off on all contingencies, you will receive a copy of the deed and a set of keys, and you then own the home!
Marcia Goodman, Realtor