Approved!!

YAY! We got approved for our mortgage! More than what we are looking for, but nice to have that cushion if we need it (or want it, hopefully not)

Anyone understand the mortgage process. I see that we have to have about 30,000 in closing costs (including the down payment), and we need an attorney etc...

Anyone with tips or tricks that we should know to save ourselves some $$ down the line?

Anything you know would be helpful, we are totally newbies!!

Re: Approved!!

Look around now and get prices from lawyers and inspectors/engineers. Once you find a house, things can move pretty quickly and you won't have much time to comparison shop.

Also, don't settle!!!!! There is the perfect house out there for everyone, and it will save you $$ in the long run than to buy the first house you see and try to make it what you want!

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any ideas on how much engineers/lawyers/inspectors cost? I will be googling, and probably stop by the library tonight to take out some books

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YES!

As someone who has bought 3 homes, sold 2 and closed 4 times, here are some tips:

- shop around for the best and most affordable closing attorney and make sure he's the one who picks up his phone so you're dealing with him personally and NOT his paralegal. as a newbie, you want someone who can negotiate on your behalf and walk you through the process

- don't use your real estate agents inspector 'cus he may not be working on your behalf, make sure every nook and cranny of the house is inspected, i've seen too many Holmes Inspection horror stories on HGTV. Watch that too if you have a chance.

- shop around for title insurance instead of using your lender's default provider, you can often save a few hundred this way, or get the lender's default title insurance co. to price match.

- check zillow.com or bankrate for the best rates from lenders (forget the banks, their rates are ridiculous), you can save alot here too; zillow users give reviews so read before you select a lender

- get a 45-60 day lock rate instead of 30 'cus you will need it

- be diligent in following up with your lender 'cus more often than not, they may have great rates but are understaffed/overworked, you don't want to miss the lock period and have to pay more (insist on the same rate if it's the lender who makes you miss the deadline)

Cost:
inspectors: 250-500 (depending on size/type of home)
attorney: 1000-1200

Hope your process goes smoothly and enjoy your new home!

Message edited 12/13/2011 12:40:07 PM.

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How were you able to lock a rate if you don't have a property yet?

The 4% may have been what they were offering that day. You need to have a property in contract to lock a rate is my understanding.

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It sounds like you have a preapproval or conditional approval, because you haven't found a home yet.

First - Are you working with a professional realtor that you trust? If not, I would really recommend doing so. A good realtor can answer all of your questions and will guide you through every step of the process, helping you troubleshoot and address issues along the way. And realtors have access to much more information, about the local market, available inventory, and buying process, than the buyers do, even with all of the internet resources available.

You definitely should research and identify home inspectors and attorneys that you would be willing to use if you find a home and get your offer accepted. You have to understand that you don't really have a firm deal in place until both parties sign the contract. So once your offer is accepted, you really want to get your home inspector in asap and then have the attorneys get the contract prepared quickly. Until the seller signs the contract, he/she is free to take a better offer. And if he/she does, they are not obligated to reimburse you for money spent on the home inspection. So be prepared to move quickly once you find a home!

An average home inspection on Long Island runs in the range of $400-$500 (of course a larger home will cost more). I've never heard of a home inspection costing as low as $250, regardless of how small the house is... $400 is about as low as I've heard. Attorneys can charge anywhere from $700 up to $2000+ for a closing. If a deal is more complex and labor intensive, such as a short sale, the fee is different. I would say $1200 is around average. I wouldn't go with the cheapest attorney around. I've had customers make that mistake against my recommendation and then later regret it, because the attorney was not responsive or accessible. As a first-time buyer, you want someone who will take the time to answer your questions, walk you through the contract, etc.

I disagree that you should never use anyone recommended by a realtor. I frequently recommend mortgage bankers, home inspectors, attorneys, etc. -- only because I am familiar with how they work and I know they will do a good job for my customers. I am a professional and I expect the people I recommend to be professional and competent and service oriented. If I find they are not, I don't recommend them anymore. But realtors are involved in real estate transactions every day and they know who's good and who should be avoided.

As for the mortgage process -- you get a preapproval at the outset so that you know what you can afford and you can show the seller that you can afford the home at the time you make an offer. But you don't actually apply for your mortgage until the contract is fully signed. Once you apply, the mortgage company will process your loan and appraise the house you are buying. If everything goes well, you will get a mortgage commitment. The contract usually specifies a 45 day period for the buyer to get a mortgage commitment. If there are no outstanding issues (with title, COs, etc.), the bank will give you a "clear to close" and the attorneys will schedule a closing.

As to when to lock the rate, you should usually wait until you know you are within 30 days of closing. Most rate locks are good for 30 days (it costs more to lock for a longer period). If rates are really fluctuating, you may want to lock sooner. Although you will have a negotiated closing date in your contract, keep in mind that it's an "on or about" date, and the closing may not happen for up to 30 days after that closing date in the contract. So if your contract says the closing date is on or about Jan. 20, you may not close until Feb. 20.

Also, keep in mind when researching rates -- lenders will advertise their lowest rates, but what rate you get depends on your individual circumstances, such as what type of loan you are getting (FHA v. conventional, 15 year v. 30 year), your credit score, your debt-to-income ratio, etc. So there's no one size fits all rate.

Good luck and have fun house hunting! Please feel free to contact me if I can help you in any way, even just to answer some questions.

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I paid $200 to do an inspection for my condo a few years ago. The going rate was 200-300 for a condo but more for houses since it takes less time to inspect a condo.

I stand by my recommendation that as a buyer, it's important to use a home inspection of your own choosing and not one recommended by an agent. The RE agent sees a thorough home inspection as a potential threat to the transaction going through so they will obviously not recommend you the most thorough ones.

Christine you may be one of the few honest agents around but I've worked with shady (both listing and selling) agents in the past and I know they are still out there.