BUYING YOUR NEW HOME IN THE ST. LOUIS METROPLEX
Home Mortgage Financing
1. Get your finances in order. Pull a free copy of your credit report at www.annualcreditreport.com. You can obtain your credit score and credit score tips at www.MyFico.com. If your credit history has blemishes, your first step should be improving your score.
A good credit score not only improves your chances of mortgage approval – you will also get a better interest rate on your mortgage.
2. Organize your financial file. Your lender will look for copies of your last 2 years of income tax returns, plus copies of your recent bank statements and paycheck stubs. Make a list of your active debt payments by monthly amount and outstanding balance. Also include statements for assets, such as retirement or investment accounts.
3. Decide how much money you can put down on your home purchase. FHA-backed mortgages require as little as 3.5% down. If you are a veteran of the Armed Forces, you may qualify for a VA loan with very attractive terms. There are also home buying grants available in some situations that help you with the down payment.
4. Once you have your financial information in order, it’s time to talk to a mortgage lender! You should interview several lenders to identify their fees and gauge the quality of their service. We can refer you to reputable mortgage lenders in the St. Louis Metroplex – just ask!
5. Begin the mortgage pre-approval process. Your lender will examine your income, debts, assets, credit history, and work history. Be prepared to supply more documentation if your lender requests it.
Your mortgage pre-approval will declare the amount your lender is willing to finance, and under what terms. It may be necessary to update your mortgage approval after 30 days. Always keep your approval active while you’re shopping for a home!
If you’d like to run some numbers today, use our Mortgage Affordability Calculator for different loan scenarios. This is a good way to see how down payment amounts and interest rates can affect your monthly payment.
Finding Your New Home in the St. Louis Metroplex
Once you know how much you afford, it’s time to shop for your home! You might spend many hours on the Internet and end up feeling overwhelmed. Plan first! Start with these questions, and talk about them with members of your household. Write down your decisions.
1. What city and neighborhood would be best for you? Consider the schools, distance to employment, shopping and dining options, and nearby parks. Find an area that suits your family’s lifestyle. Location counts!
2. What are your priorities in a home? How many bedrooms and baths? Are you looking for a large yard, or something low-maintenance? Are you able to tackle homes that need a little work, or do you need something move-in ready? Sort out the amenities that you absolutely need from the dream list.
3. Set a timetable for your home search. Be willing to set aside several hours to tour homes that suit your criteria. Remember, mortgage pre-approvals expire, and mortgage interest rates can change. Once you have a pre-approval in hand, the clock is ticking.
4. Search for homes on our website! To save time, please contact us with your home criteria and we will do the work for you, at no charge! We will find the ideal homes that suit your needs, and send you recommendations via email.
5. Contact Star Realtors to arrange showings of the homes that interest you. We will coordinate your appointments to minimize your time and travel. Our VIP service will treat you like a star!
Making the Offer
When you’ve found the ideal home, don’t wait – make an offer! If you do not make an offer, you risk the home being sold before you have a chance to get back to it. Here are strategies to keep in mind!
1. Make your best offer first. The seller may accept your offer, or counter it with another price. But if you make your offer too low, the seller may not bother to counter, especially if another buyer is expressing interest.
2. Understand what contingencies are appropriate. It’s reasonable to put contingencies in your offer to protect yourself – things like the purchase being subject to mortgage loan approval, and a home inspection. Avoid going overboard. Too many contingencies can cause a seller to decline your offer.
3. Stay within your financial abilities. If you are not comfortable with the home price or terms of the deal, go no further.
Once your offer has been accepted, the clock is ticking! There are several details to keep in mind:
You will need to purchase a homeowner’s insurance policy that will be effective as of the closing date.
You will need to follow up with your mortgage lender to make sure everything is on track. Be prepare to promptly supply updated financial documentation if your lender requests it.
IMPORTANT: Avoid taking out new loans or making major purchases during this time. Doing so could have an adverse effect on your mortgage qualification. Having a pre-approval does not mean your loan cannot be denied. New financial behavior can be a red flag to a lender.
If you have requested a home inspection, be certain it is completed well in advance of closing. This way, if any issues arise, you can work them out with the seller.
At closing, you will be given many documents to review and sign. You will present a check for the mortgage down payment. The Settlement Statement will identify the transaction elements and costs belonging to the buyer and seller. You should review all documents, and if you have questions, ask before you sign them. You will get copies of the documents for your records.
Title to the home will be transferred into your name and filed with the county office. You will be given the keys to your new home.
Your American Dream has just come true!