Submitted by Chris Johns for On Q Financial
There’s a saying that many of us try to live by: “Keep It Simple Stupid” (aka KISS). Not insinuating that people are stupid, but like any other kind of information that’s not familiar to us—we need to be able to sift through it to grasp the basic points. What better way to understand something than to keep it simple in the first place?
This is the foundation behind On Q Financial Mortgages Simplified approach to home loans. In Part 1 of this blog series, I covered the basis for Mortgages Simplified but nowhere is the need greater for its use, perhaps, than with first-time homebuyers. Why?
Think of the home buying process like learning how to ride a bike. No matter how many times you hear how to do it from someone else, the only way you learn is by actually doing it—riding the bicycle. If you fall, you simply get back up, hop on the bike, and ride again. With homeownership, falling can be a more painful experience to your wallet, if you don’t get the right coaches to keep you on track.
With the end of the year approaching (sooner than you think), and filing for those sacred tax refunds is just around the corner, now is the perfect time to learn how to ride the proverbial home loan bicycle so you don’t take a fall. Whatever you do between now and April 15, make homeownership a consideration.
If you’re a would-be first time homebuyer, let me introduce you to the Mortgages Simplified process. Think of it as a streamlined, straight line to the finish line. So how do you get from start to finish? Clear, consistent communication with the people who will serve as your mortgage coaches: the loan originator, loan processor, and transaction coordinator.
The loan originator is usually your initial point of contact. They are licensed professionals and usually the lead in your business partnership helping you work through the entire process. They will help you with your loan options (FHA, VA, Conventional, 30- 15-year fixed, or ARM programs) and tell you how much home you qualify for, what your interest rate is, and continue to guide you through the escrow period until your loan closes. The escrow period is the timeframe established in the purchase contract. It allows home buyers the time needed to achieve full loan approval, in addition to completing property inspections, and ultimately funding their loan for the successful transfer of the property.
The loan processor takes your financial, credit, rental history, and income verification information that you provide and builds your loan file so that it is ready to give to the loan underwriter.
The loan underwriter has an eye for detail and reviews the documents in your file to ensure your information meets with the specific loan guidelines. If they need more information to strengthen your file, they will ask—even up to the day of closing on your new home.
Loan originators are often extremely busy as they handle both new home purchases and refinances so they often work with transaction coordinator to ensure that the clear, consistent communication I mentioned earlier is maintained.
Mortgages Simplified works like a KISS (keep it simple stupid). It works even better when you, the first-time homebuyer, opt to work with a professional REALTOR®. If you don’t know of one, and you may not if you haven’t done this before, ask your loan originator for a referral.
The typical escrow period on a home purchase is 30-45 days, from signing the purchase contract to owning your new home. Ask your Realtor® and Loan Originator what escrow period works best for your loan type and property.
Before you get your new house keys, take note of the following steps in the purchase process:
- Home Inspection Period
- Appraisal
During the escrow, you will have a home inspection period. This is the time to consider hiring a reputable home inspector (third party) who will check all the systems of the home such as the plumbing, electrical, AC/heating, roof, insulation and basic structural aspects of the home. It allows you the more detailed information you need about the home so you have a better idea of what you’re buying. If there are too many repairs needed, you can ask the seller to repair the items, or decide to cancel the contract (as long as you cancel during the inspection period).
The appraisal is a report conducted by an appraiser that your lender sends to the property during the escrow period. The appraiser measures the property and verifies the lot size, square footage, and assesses the condition of the home. With these findings the appraiser uses any one of three different approaches to measure the property’s value. The appraisal is crucial to the mortgage as a lender will not provide loan funds for a property that has a value less than what the purchase contract is written for. If the property does get appraised under purchase price value, it allows the buyer the opportunity to renegotiate the purchase contract or cancel the contract.
For both the home inspection and appraisal aspects of the purchase contract, consult with a Realtor® for more detailed information.
Did this seem complicated? Remember, you don’t have to be the experts. Sure, do all the research you can. Become informed. But remember that bicycle I referenced in the beginning of this blog? There’s no reason for you to fall off the home purchase process. With Mortgages Simplified at On Q Financial, you have the right coaches there at your side with every turn of the wheel. We’ll guide you from start to the finish line. All it takes is a KISS.
If patience isn’t your virtue, look for my next blog that highlights the benefits of a 15-year loan and how it can turn your home into a giant piggybank!
For more information or to contact Chris Johns at On Q Financial, visit www.chrisjohns.onqolympia.com or call (360) 347-8000.
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On Q Financial, Inc. is an Equal Housing Lender. NMLS# 5645 / Washington Lender #CL–5645. This material is provided for information and educational purposes only. The material is deemed to be accurate and reliable at the time of being published. This is not an offer for extension of credit or a commitment to lend. Some restrictions may apply.
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