Thinking of getting serious with your home-buying search? Let sellers know you’re serious, and arm yourself with the crucial knowledge of knowing what to expect before signing on the dotted line.
Step 1: Know What You Can Afford
First, get a solid idea of what's in your price range. Start by entering your annual income into our “How much can you afford?” mortgage calculator. Based on your income, you'll get a list of interest rates, loan types, loan amounts, and monthly payment ranges. Not only will this give you an accurate picture of what you can expect to pay each month, but you can use it to set a ceiling as far as how much you can borrow.
With those numbers in mind, start the application process for a home loan. Starting your application process before you start looking for a house is critical – it will give you some time to get prepared, and ensure you're not scrambling to find a house while doing paperwork at the same time. It also shows sellers that you're taking the process seriously, which can work to your advantage if multiple offers are being reviewed.
What you need to apply
You'll need to provide documents that verify your source of income and financial situation. Some information you'll need to provide may include:
- Employment and income verification
- Tax returns
- Debts (credit cards, loans, etc.)
- Bank statements
Click here to see an expanded list of documents you'll need to provide. Our team at Real Estate Services can help you through this, and match you with a qualified real estate agent in your area. The agents we use are experts in the local market, and can help you through the entire home buying process – from application to closing paperwork. You'll also get cash back at closing, and a great low rate.
Click here to get started on your application.
Step 2: Find a Home
Once you've provided the above documentation to us, we'll review everything, ask any questions, and submit your information to an underwriter. This is a good time to start looking at the areas in which you'd like to live, and see if any homes in that area meet your needs and fall within your budget.
Our team at Real Estate Services can help you with this. Click here to search the Northwest MLS database to see what's available, and click on a home on the map to view it. From the window that appears on the right, you can save it as a favorite, view more details, or schedule a visit. By scheduling a visit, you'll be connected with a licensed realtor who's been hand-picked by Real Estate Services. The realtor will be your advocate throughout your home search, and you'll earn cash back at closing.
If you haven't yet started the application process, click here to get started.
Step 3: Review Your Loan Estimate and Close
After your application is complete, you'll receive your loan estimate. A loan estimate is a document detailing the entire loan transaction. It explains how much you're actually borrowing, what you'll pay in closing costs, and provides your final monthly payments based on your loan terms.
Here's a quick breakdown of what you'll see in a loan estimate: (Remember, our Real Estate Services team can help you through this part of the process as well.)
- Loan terms – statement of the full loan amount, interest rate and other payment details
- Projected payments – your estimated monthly loan payments, including taxes, interest, insurance and escrow
- Costs at closing – itemized list of fees that go into closing your mortgage, including your estimated cash to close
- Comparisons – list of your total payments in principal and interest over five years, the Annual Percentage Rate (APR) and Total Interest Percentage (TIP)
- Other considerations – statement of additional loan terms such as penalties for late payments and requirements for homeowners insurance, plus the possibility of private mortgage insurance (PMI), escrow fees, and homeowner's association (HOA) dues.
Remember: Your credit will be pulled each time you apply, but if multiple lenders pull your credit for the same type of loan within a 7-day window, the effect to your credit score should be minimal. Just keep this in mind as you apply.
Questions? BECU's mortgage advisors can assist you through the process from start to finish. If you're ready to start searching for the perfect home, then we're ready to help you find it.