About Saint Tammany Parish, LA

Understanding The Closing Process

Once your loan is approved, you will be ready to take the final step that will lead to the door of your new home. Many homebuyers are intimidated by the closing process, but it's not as complicated as you may think. In fact, finding the right home is much more difficult than closing the deal.

Making It Official

The closing process begins with the borrower and lender meeting in the presence of a notary public. This is a person who is authorized to oversee, create or certify contracts, deeds and other legal documents. At the conclusion of the signing, the notary public will provide their stamp and signature, which certifies the identification of everyone present and the signatures on the loan application.

Handing Over The Cash

When you meet with the lender to close the loan, you will be required to produce your down payment and, if required, the closing costs. Ask your lender about acceptable payment methods, which may include a cashier's check or other certified funds. If you have an account with the lender, a personal check may be accepted in some circumstances.

Review The Loan Documents

At closing, this will be your final opportunity to review the loan documents. You should make sure that everything is accurate and as promised, including the interest rates and loan term. It's also important that you confirm that the names and addresses are correct, along with other important information relating to the loan. If anything is inaccurate, now is the time to make changes. Never sign the loan documents until everything is perfect.

Sign Here, Please

Once everything is verified and the loan documents are approved by both you and the lender, it's time to sign on the dotted line. Believe it or not, this is one of the most nervous times for a homebuyer. If you've chosen the right home and are comfortable with your loan, however, it can also be one of the most exciting. Once the documents are signed, the notary public will affix his/her stamp and signature.

It's A Done Deal

The final step in the closing process is a simple handshake. Most lenders and homebuyers will extend their hands and, with a smile, the person who was just a homebuyer is now a homeowner. Now that's something to shake on! With the keys to your abode now firmly in hand, it's time to get moving and turn your new house into a home.

Step-By-Step Guide In Obtaining A Home Loan

Now that you've decided to purchase a new home, it's important to know what to expect throughout the loan process. With the right knowledge, the road to home ownership is just ahead.

Check Your Credit

Before you even think about applying for a mortgage, it's important to know where you stand from the lender's point of view. Checking your credit report is a good idea for many reasons, but it's an essential step in your journey toward buying a home.

Every 12 months, you can request a free copy of your credit file from each of the three major credit reporting agencies - Equifax, TransUnion and Experian. Look for inaccuracies, outdated information or anything that requires your attention. If you spot anything, file a dispute right away to get the information corrected. A free credit report does not include your FICO score, which is available from the credit bureaus for a small fee. Most lenders use this number in determining your interest rates and creditworthiness, so it may be a good idea to check it out for yourself first.

Gather Your Documentation

When you apply for a loan, you will be asked to provide certain documentation and/or information relating to your current financial status, employment, assets (including both real and personal property) and liabilities. Before meeting with your lender, make sure to have your current paystubs, bank statements, tax returns for the two years preceding your application and information relating to any debts that you currently owe. If you are self-employed, you will also be asked to provide a year-to-date profit/loss statement, which is also known as an income statement.

Meet With Your Lender

Now that you have your documentation together, it's time to meet with your lender. At this point, you will complete a mortgage application and submit it for approval. Depending on the lender, it may take anywhere from several hours to several days before learning whether or not you are approved. In most cases, however, a lender can provide you with an answer within 24 hours.

Last Minute Details

If your loan is approved, it's time to move forward to the next step in the mortgage process, choosing a home. Your lender will order an appraisal and inspection to be completed on the property. This is just as much for your own protection as it is for the lender because it may reveal hidden problems within the home. The inspection and appraisal can take up to 30 days, at which point the results will be forwarded to the lender. If all goes well, you will close on the loan and get ready to move into your new home.

What Is An Earnest Money Deposit?

An earnest money deposit, also known as a good faith deposit, is a specific dollar amount that a potential buyer pays to the seller in an effort to display their serious interest in a property. It's important to note that an earnest money deposit is not the same as a down payment.

The Purpose Of An Earnest Money Deposit

An earnest money deposit is used to secure a purchase contract, which means the buyer doesn't have to worry about the property being sold out from underneath them. Without an agreement, the seller would be free to sell the home at anytime. An earnest money deposit, however, secures the availability of the home as the potential buyer obtains an inspection, appraisal and financing for the purchase.

How Much Good Faith Is Enough

So, just how much of an earnest money deposit is required? Truthfully, it depends on a number of factors, including the home's purchase price, your location and the standard as set by other sellers. In most cases, the earnest money deposit is negotiable and the seller will be happy in knowing that the potential buyer is serious enough to offer their money in good faith.

How An Earnest Money Deposit Is Used

If the transaction is successful and the buyer follows through with the purchase, an earnest money deposit is most commonly refunded to the buyer or applied to closing costs. If the buyer defaults or is unable to obtain financing, the seller often has the discretion to retain the earnest money deposit as damages or as otherwise described in the purchase agreement.

Using Your Dollars And Sense

When it comes to an earnest money deposit, it's essential that buyers know who should receive the money and how to handle the payment. In most cases, the deposit should be made payable and presented to a licensed real estate broker, an attorney or escrow company. Your REALTOR® can assist in getting your earnest money deposit into the right hands. It's important to obtain a receipt, which should clearly outline the purpose of the deposit. The funds will be handled in accordance with the purchase agreement and/or as agreed upon by both the buyer and seller.

Before handing over a good faith deposit, make sure that you have faith in the person accepting your money. Potential buyers should not give an earnest money deposit directly to the seller, nor should they give it to anyone who claims to be with a brokerage firm unless their credentials are verified.

What Is A Home Warranty Plan?

A home warranty plan, also known as a home protection plan, is a service contract that offers homeowners a way to safeguard themselves against possible breakage or a malfunction within the home. It's impossible to predict the future, which is why so many buyers look for that little extra peace of mind to comfort them when life unexpectedly throws them an unforeseen problem.

Who Needs A Home Warranty Plan

Basically, anyone who purchases a home and is concerned with the cost of repairs should consider a home warranty plan. This is especially true of first-time home buyers who may not be familiar with home maintenance.

Factoring In The Cost

When factoring in the potential cost of repairing a major appliance or other home component, a home warranty plan may not be a bad investment. The actual cost of warranty coverage will depend on the plan chosen and the items protected. As is the case with everything in life, it's best to shop around and compare prices.

Who Pays For A Home Warranty Plan

As a buyer, you can order a home warranty plan in conjunction with the purchase of your home. However, some sellers or builders may include this type of offering as an incentive to attract potential buyers. In this case, the plan is yours at no additional cost. Some REALTORS® may also offer a home warranty plan as a gift to customers who buy a home through their agency.

What's Covered & What's Not

Just like a car warranty, no two policies are the same. Coverage varies by location and issuer, and your REALTOR® can help you to choose a warranty plan that best suits your needs. Most basic plans cover a home's heating and cooling system, electrical system, plumbing, water heater and major appliances, including a dishwasher, range/oven/cooktop, garbage disposal, etc. Coverage does not apply to items that are misused or damaged, either intentionally or through negligence. Instead, most home warranty plans are designed to protect the homeowner from defects that result during the course of normal wear and tear.

When considering the purchase of a home warranty plan, review the complete contract and familiarize yourself with exactly what's covered under your policy. If you want an upgraded policy, don't hesitate to ask your REALTOR® if one is available. Most companies do not require a home inspection and will notify homeowners when their coverage is about to expire. The good news is that most policies are renewable.

What To Do If A Problem Arises

If you are unable to satisfactorily resolve an issue with your home warranty plan, either due to denial of a claim or undesirable service, talk to the REALTOR® who sold you the home. If he/she refers a lot of business to this particular company, it may be possible for him/her to speak with them about reaching an amicable resolution.

The purchase of a home is a big step and it's likely to be the largest purchase you will ever make, so be sure to consider all of the options available to help protect yourself from costly repairs. Ask your REALTOR® for more information relating to available home warranty plans.

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