Home Buying Basics

“Financially Fit” is a column published by RCB Bank to help you gain knowledge on all things financial.

Learning the basics to better understand the mortgage process. Pictured: Roger Evans, RCB Bank lender.

Buying a home can be an intimidating process, but with a little knowledge under your belt, you can better understand the process and become a stronger borrower. Here some things you should know before you buy.
    Obtain a pre-qualification from your lender: Before you begin house hunting, identify the prices you can afford with a reputable local bank. Obtaining a letter from them will help you become more knowledgeable about your future loan and make you a stronger borrower with bargaining position with the seller, showing them you are a serious buyer.
    Choose a Realtor: You want to find one that’s knowledgeable and professional. They should be familiar with the area you are interested in and willing to listen to your wants. I would probably ask them for references from former clients of theirs. Your mortgage lender may be able to provide some reputable recommendations.
    Shop: Discuss with your significant other and/or your family members what type and size of home fits your needs. Write down a wish list of details you would like as well as what you don’t, so your realtor can narrow down the options before you go out looking at homes that would not work.
    Make an offer: Once you find THE home, you and your real-estate agent will write a contract with your offer to the seller including price, inclusions, and closing date. The seller can counter to your offer changing your previous offer until all parties agree or contract falls through.
    Fully apply for loan: It’s now time to finalize your loan. You can now lock in your loan and determine final selections of terms and mortgage insurance premium choices. You will now sign the formal application and possibly provide more updated documentation to the lender that might have expired since the prequalification.
    Home Inspection: This is typically ordered by your realtor with your approval. The inspection will provide a thorough look at the safety and functionality of all working parts of the home. This should provide you the information to decide on ­continuing with the purchase ­transaction or stopping it based on negative findings.
    Appraisal: The appraisal is required by the lender and ordered by them as well. This provides a formal evaluation of the home’s market value. This could help you from overpaying for your home.
    Final Underwriting Approval: All loan ­conditions have been met and approved by the ­underwriter. Immediately ­following this approval, ­closing instructions are sent by your lender to the title company to derive the final dollar amount that you will need at closing including down payment and closing fees.   
    Closing: The closing agent (title company) coordinates and distributes the funds and paperwork as well as the ownership of the property. You are now the proud owner of a home!
    RCB Bank’s loan officers are more than happy to answer any questions you might have about mortgages or the home buying process, even if you are not a customer. Stop by your local RCB Bank branch to speak to one of our personable officers, or you can email your questions to a local officer. View a listing of our officers by city online at www.rcbbank.mortgagewebcenter.com or call 855-BANK-RCB. Member FDIC. RCB Bank is an Equal Housing Lender.    Opinions expressed above are the personal ­opinions of Kenneth Wohl and meant for generic ­illustration purposes only. For specific questions ­regarding your ­personal ­lending needs, please call RCB Bank at ­­855-BANK-RCB. For more information, contactRCB Bank 855-BANK-RCB www.RCBbank.com