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To-Do Lists

When it comes to buying a home, you want to make sure you're prepared. Our lists can help. Just check off the tasks every step of the way.

Doing the Prep Work

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Getting all your documents in order helps speed up the process when it comes time for getting pre-approved. Your lender may require additional documentation or information to complete your loan application, but having the following ready helps get things started.

Learn the differences between renting and owning and start doing the math.

Lenders look to your credit report and credit score to predict future financial behavior. You'll want to review your credit report for accuracy and make sure there are no errors. To order a free copy of your credit report, visit annualcreditreport.com. To find out your credit score, visit myfico.com. Usually, the higher your credit score, the easier it is to qualify for loans.

Current pay stub/Leave and Earnings Statement (LES), W-2s/tax returns for the past two years, and two months of bank/stock statements.

  • Copy of transfer orders/relocation agreement
  • Year-to-date Profit and Loss Statement (for self-employed borrowers)
  • VA documentation including Certificate of Eligibility (COE)

Getting Pre-approved

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Getting pre-approved should be one of the first steps you take before shopping for a home. A pre-approval means a lender has approved you for a loan at a specified amount based on your income, assets, debt, and credit. Pre-approvals can usually be completed within one to two business days of receiving all requested documentation.

If you've done the prep work from the previous list, you have a copy of your credit report and credit score. This gives you an idea of how likely you are to be pre-approved before contacting a lender. Lenders will pull your credit as a part of the pre-approval process.

You will need to provide income and asset documents to verify your creditworthiness. You can learn more about the documents Navy Federal requires to determine if you qualify for a pre-approval here.

Haven't applied for pre-approval yet? You can do so easily right here. Get pre-approved.

Your lender will provide a letter of pre-approval, verifying the mortgage amount that you've been approved to borrow. Having a pre-approval letter in hand helps move the home buying process along, but doesn't prevent others from putting an offer on the same home. Most sellers will require a pre-approval to validate the sales contract on a home. It confirms your ability to afford the home and go to closing with no financial issues. Providing your loan officer with documentation will help them craft a stronger pre-approval letter and makes you more competitive when submitting an offer.

Searching for a Home

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Now that you have your pre-approval letter in hand and know the amount you can afford, it's time to start house hunting. A little planning and expert help will ease the process and ensure you get the right home.

A licensed real estate agent can provide advice, set up home showings, and handle the details of writing a contract on a home. Known as a "Buyer's Agent," this realtor represents your interests in negotiating the sale and following up on required details, such as inspections. To find an agent, ask friends and relatives for referrals, or if you're a Navy Federal member, consider using RealtyPlus®.

Create a list of the features and amenities you need in a home. Then prioritize your list. Taking this step will help you communicate clearly with your realtor. Consider the following:

  • Location or neighborhood and proximity to work, school, shopping, etc.
  • Number of bedrooms and bathrooms
  • Size of the lot/yard
  • Type of home: condo, single-family, loft, etc.
  • Age and style of home
  • Special features, such as workshop or in-law suite

Determine the neighborhoods or general locale in which you prefer to live, keeping in mind your pre-approved loan amount. If you're unfamiliar with certain areas, your realtor can help. Also consider test-driving your commute to work or school.

As you begin looking at homes, take a notebook with you to write down the pros and cons of each property. Photos or videos can also help, especially if other family members aren't able to join you on your search. Touring homes can be exciting and confusing. Don't forget to compare each home to your priority "wish list" before making an offer.

Making an Offer

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It's time to take the plunge. Writing a contract on a home is a big step—and a legally binding one. Your offer will include the price you are comfortable offering, earnest money, and any addendums and contingencies you want to include. The tasks below will help safeguard your interests and keep you on track to get the best deal.

Your realtor can help you determine a fair offer on the house you'd like to buy. Considerations include:

  • Comparable (comps) home sales in the area
  • Age and condition of the home
  • Location

You will also be asked for earnest money to secure the contract and show the seller that you are serious about buying the home. The amount of earnest money varies depending on the price of the home and conditions of the contract.

Your realtor and loan officer can give you the best estimate on timing. Once you've established an offering price, you'll need to determine when you would like to close on the home. You may have a specific date in mind due to a relocation or lease expiration. Your realtor can help you decide the best closing date based on the amount of time it will take to conduct inspections, surveys, appraisals, etc., and advise you about other timing considerations which may affect closing costs.

Things like furniture, appliances, window coverings, etc., or any specific needs you may have that fall outside the sales contract can be included as addendums as part of your offer. Common standard addendums include lead-based paint and pest inspections. You'll also want to talk to your realtor about including financial, appraisal, and home inspection contingencies. These contingencies help protect you as a buyer and give you a way out of the contract if needed.

Once the offer is sent to the seller and agent for review, some back-and-forth may occur before arriving at a price and terms agreeable to both parties. Your realtor can help assess the seller's position and help you make counter-offers. Once these details are agreed upon by both parties, the final contract is signed, ratified, and the house is "under contract." Once the contract is ratified, you'll want to provide a copy of it to your lender as soon as possible to start the mortgage process.

Under Contract

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You are nearing the finish line once the contract is signed! In this important phase of the buying process, many details must be addressed before the mortgage can be finalized and closed.

Although optional, a home inspection is a recommended contingency that safeguards the buyer against unseen problems within the home. It's wise to shop around for a good inspector and compare prices. Home inspections can reveal pricey improvements, which at this point in the buying process can be negotiated with the seller. Your realtor can help set up this inspection. A typical home inspection includes: testing the HVAC, electrical and plumbing systems, appliances, and evaluating the home's roof, exterior structure, and foundation.

You will need to provide your lender with a copy of the signed contract. At this point in the process, you may be asked to verify information needed to close the loan. This includes the most recent two months' bank statements for all accounts (including stock and retirement accounts), W2s/tax returns for the past two years, and other documents (DD214, divorce decree, statement of service, etc.). This also sets the wheels in motion for the lender to order the appraisal and title search.

Your lender will order an appraisal of the home you intend to buy. It is not necessary for you (the buyer) be present. Your realtor or the seller can let the appraiser into the home. A copy of the appraisal should be sent to the buyer by the lender after it has been reviewed and approved. The appraiser does not send a copy to the buyer, nor do they discuss the value of the home with the buyer.

Depending on the terms of your contract and the conditions required by your lender, other inspections or evaluations (such as a property survey, pest inspection, well and septic inspection, or flood plain assessment) might be required. Your realtor can help facilitate these inspections and reports.

Closing

Closing on a home is the culmination of the home buying process. During this final step, all last-minute details surrounding the conditions of the home loan are finalized by the lender. By taking care of the following things ahead of time, you'll help ensure a smooth closing.

Prior to closing, the loan officer will tell you how much is needed for closing costs, including any down payment. Buyers are usually asked to bring a certified check. If you are using Navy Federal as your lender, the funds may be wired from your Navy Federal checking or savings account to the settlement company.

You will need to bring a valid U.S. driver's license, passport, or other legal ID. A second form of identification (credit card, insurance card, etc.) is often requested. If you have a co-borrower on the loan, they will need to provide identification and be present at closing to sign the required paperwork. If you are unable to attend closing, you will need to talk to your realtor about setting up a Power of Attorney prior to settlement.

It's a good idea to bring a copy of the final contract, addendums, and any other paperwork pertaining to your home. If your realtor is present, they may also bring the contract agreement. This safeguards you if questions arise about the closing costs, which are often shared by the buyer and seller.

Your lender will provide the total closing costs before closing, but should there be a slight discrepancy, you may owe incremental fees once the paperwork is complete. In most cases, the closing agent or attorney will accept a personal check for the difference. Talk to your lender or closing agent about their policies so you can be prepared for any last-minute changes.