YOUR PERSONAL GUIDE TO THE HOME BUYING PROCESS MOVEMENT MORTGAGE PRESENTS
The home buying process comes chock-full of details: Industry terms and acronyms, financial documents, a roster of various professionals you’ll need and more.
We’re here to break the process down so you can begin your home buying journey with all the tools and knowledge you need.
Let’s dive in!
SO YOU WANT TO BUY A HOME?
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INTRO
2 THE HOME BUYING GLOSSARY HERE’S A LIST OF GOOD-TO-KNOW TERMS AND ACRONYMS:
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A document issued to you that provides final details about the home loan you’re opting into.
HOME SELLER
HOMEBUYER
A person interested in buying a home; you.
A person interested in selling their home.
LOAN OFFICER (AKA LO)
A ratio that shows the comparison of monthly debt vs monthly income that a lender will use to determine your eligibility for a mortgage.
CLOSING DISCLOSURE (AKA CD)
A person licensed to assist borrowers in acquiring a home loan.
REAL ESTATE AGENT OR REALTOR
EARNEST MONEY
When you take out a mortgage to purchase a home and put less than 20% down, you’ll likely be required by your lender to pay for PMI which protects the lender in case you default on your loan.
PRIVATE MORTGAGE INSURANCE (AKA PMI)
The payment a homebuyer provides at closing to the seller in order to secure and commit to the loan amount (dependent on several factors, and percentage required will range based on loan product).
An amount of money (usually 1-3% of the sale price) given to the seller to show that a homebuyer is serious about their offer to buy the home. This payment will usually be deducted from the total sale price at closing.
A person licensed to represent sellers or buyers of real estate.
DOWN PAYMENT
DEBT TO INCOME RATIO (AKA DTI)
ESCROW
A document you’ll sign to acknowledge what lender has outlined and formalize your agreement to go to the next step of the process.
VERIFICATION OF EMPLOYMENT
INTENT TO PROCEED
ADJUSTABLE RATE MORTGAGE (AKA ARM)
Any mortgage loan that is not insured or guaranteed by the government. Conventional loans offer a wide range of down payment options and financing for properties commonly restricted by government.
FIXED-RATE
An underwriter may ask you to put additional clarification in writing as part of the application process.
LETTER OF EXPLANATION
A loan that has the same interest rate throughout the life of the loan.
LOAN ESTIMATE
After a seller has accepted an offer, any money involved in the purchase is handled by a third party that holds onto the money until everyone comes to a deal.
As part of your application, you’ll provide documents to prove your employment and income.
A document you’ll receive after you apply for a mortgage that outlines important information about what you may qualify for and associated costs.
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A type of home loan that starts with a fixed interest rate for a specified number of years and then may increase a certain amount after that period. These loans typically have lower interest rates than conventional loans.
CONVENTIONAL LOAN
VA LOAN
JUMBO LOAN
FHA LOAN
If you’d like to buy a home but lack credit, a down payment or are unable to cover closing costs, an FHA loan may be the solution. FHA loans are government-backed and were developed to provide homebuyers with an alternative to conventional financing and offer flexible guidelines.
If you’re active-duty military, a veteran or an eligible family member of a military veteran, you may qualify for a Veterans Affairs loan, and one of Movement’s biggest perks – waived lender’s fees*. The VA Mortgage is a government-based product offering 100% financing of the reasonable value of the property, with less restrictive qualifying terms than conventional programs.
Most traditional loans are considered “conforming loans” and are limited to homes valued at $647,200 or less. If you’re considering investing in a higher-value property, Jumbo loans are non-conforming loans that offer financing options as high as $3 million.
Also known as a reverse mortgage, Home Equity Conversion Mortgages allow homeowners age 62 or older to tap into any equity they’ve built up in their home. Seniors can withdraw a portion of their home’s equity and use it to relocate closer to family, move into a home that better meets their needs or move into a community that can help increase quality of life.
USDA LOAN
Backed by the USDA, this type of loan offers qualifying low-tomoderate income borrowers the option of no down payment when they buy in a designated rural area. This loan also offers flexible guidelines to eligible applicants.
HECM LOAN
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*Excludes other VA-permissible itemized charges. VA loans require a VA Funding Fee that may be financed into the loan or paid out of pocket at closing. All eligible Veterans and Reservists must meet all VA income, asset, and property requirements. For loan amounts exceeding $647,200, the amount of the VA entitlement or the entitlement plus the down payment must equal 25% of the property’s reasonable value.
6 NOW THAT YOU KNOW THE LINGO, LET’S TAKE A LOOK AT THE HOME BUYING PROCESS STEP BY STEP
30% 10%15% 10% Payment35%History CrNewedit CreditMix HistCreditoryLength AmountsOwed
• What is your FICO*
CONNECT WITH A
The best place to start is a conversation with your Movement LO to discuss where your credit stands.
LOAN OFFICER STEP 1
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WHAT YOUR CREDIT SCORE IS MADE UP BY
YOU CAN ALSO USE THIS CONVERSATION TO ESTABLISH EXPECTATIONS WITH YOUR LO.
• Create a list of folks you’ll need to reach out to during the process
• Go over any documents you need to start getting together
*Source: www.myfico.com
• Work together to establish a timeline for your home buying process
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Once you’ve met with a loan officer and established expectations it’s time to apply. With just a few taps on your phone or clicks on your computer, you can begin the home loan process using our online application at movement.com/apply.
STEP 2
START APPLICATIONYOUR
GATHER YOUR DOCUMENTS FOR THE APPLICATION
INCOME: Your monthly income, child support/alimony received and any other income.
You’ll be asked to upload W2s, pay stubs and bank statements. You may also need some physical documents depending on the situation.
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DETERMINE YOUR DTI
INCOMEDEBT = DTI%
Your DTI (debt to income ratio) shows the comparison of monthly debt vs. monthly income that will help lenders determine what you’re eligible for.
DEBT: Your rent/mortgage payment, car payment, student loan payments, credit card debt and child support payments.
DTI is an important part of what you qualify for. Ask your loan officer if your DTI is where it needs to be.
Once you complete your application, it goes to an underwriter who will determine your pre-approval.
*While it is Movement Mortgage’s goal to provide underwriting results within six hours of receiving an application, process loans in seven days and close in one day, extenuating circumstances may cause delays outside of this window.
STEP 3
Underwriters look at your credit history and finances to assess your credit-worthiness. Movement’s underwriters seek to do this within 6 hours*.
Another benefit of getting pre-approved is you’ll know your price range.
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If you’re pre-approved, your status will likely become “approved with conditions.” This means you’ll be approved for a loan if certain conditions are met – usually providing missing documentation.
Sellers prefer a pre-approval over a pre-qualification because it’s based on verified personal financial information, not simply a homebuyer’s self reporting.
GET PRE-APPROVED
You’ll want to work with a professional who knows the area and has the right credentials. If you’re not sure where to find a great realtor, your loan officer will have some recommendations.
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FIND AN ALL-STAR REALAGENTESTATE
STEP 4
START SHOPPING
If you don’t already have a place in mind, start looking for your dream home – while knowing your price range thanks to the pre-approval.
STEP 5
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If you choose a home that meets your needs and priorities, you’ll be happy living in it for years to come.
Now, back to SHOPPING!
• Apply for new credit
BUT FIRST...
• Stay current on payments for all existing obligations
• Pay off collections, judgments or tax liens from the last year
(All of these actions can change the credit profile that your preapproval is based on.)
DON’T:
Call your loan officer before making any decisions or changes to your normal financial routine so you stay on track.
Make sure you follow these DOs and DON’Ts after you’re pre-approved and begin shopping for a home:
• Consolidate debt to one or two cards unless advised by our team to do so
• Max out or overcharge existing credit cards
DO:
• Keep your employment and let us know of any changes
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14 PAY ATTENTION TO THESE 5 THINGS WHILEHOMESTOURING STEP 6
Location matters. Try not to convince yourself otherwise. If it’s your dream home but not in a great location, it’s not actually your dream home.
1. THE LOCATION
2. THE HOME’S STRUCTURE, SYSTEMS AND SCENERY
3. WATER DAMAGE
If you see signs of water damage during your home tour, talk to your real estate agent and contractor before committing to purchase. Hopefully, if you catch issues early, you won’t be saddled with costly renovations.
4. ODOR
This is an easy way for people with allergies to determine whether previous owners smoked or had indoor pets. The sniff test can also tell you whether smell-trapping areas of the house like carpet need updating.
5. STORAGE AND SPACE
Look at anything in the house that will cost money to fix: appliances, flooring, landscaping, roof and HVAC systems. Make sure they’re in good shape so you don’t get stuck with those expenses.
Check to make sure the home’s storage space is ample to accommodate your stuff and keep you organized.
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16 KEEP THESE 5 EXPENSES IN MIND AS YOU SHOP STEP 7
Be prepared to spend several thousand dollars just on closing costs. As a buyer, you’ll have to pay attorney’s fees, lender fees, appraisal fees, title fees and a recording fee just to put your home’s deed on file with the state. Generally speaking, you need to have anywhere from 3-5% of the purchase price of the home saved for closing costs and prepaids (which include your first year of homeowners insurance and setting up your escrow account).
2. PROPERTY TAXES AND HOMEOWNERS INSURANCE
Most experts in the biz recommend buyers foot the bill for a home inspection, and not all recommended repairs will be covered by the seller. Depending on what your state requires, you might need a general inspection along with chimney, geological and/or sewer inspection — each running roughly a $1,000 tab.
You’ll probably want to set up an escrow account where your loan servicer can pay your insurance and tax payments for the life of your loan. All lenders require buyers to pay up to a year of homeowner’s insurance at closing.
1. CLOSING COSTS AND FEES
3. PRIVATE MORTGAGE INSURANCE (PMI)
Find out if you’ll need to pay homeowners association fees – how much and how often.
A monthly fee for buyers who put down less than 20% on their new home. PMI covers your lender in case you default on your loan.
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5. HOA FEES
4. INSPECTIONS
Once you’ve found the home you feel is right, work with your loan officer and real estate agent to determine the best way to structure your offer.
While much attention is paid to the asking price of a home, a proposal to buy includes both the price and the terms.
MAKE AN OFFER
STEP 8
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You’re getting a new home!
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The seller picked YOUR offer!
DANCE
Start celebrating, because soon you’ll soon be crossing ‘t’s, dotting ‘i’s and moving in.
YOUR BID WAS ACCEPTED!
STEP 9
STEP 10
An inspector will thoroughly check the property to make sure everything is up to code and spot any problems that will need to be fixed immediately.
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INSPECTIONSCHEDULEYOUR
Choose a seasoned inspector who can find the things you won’t see on the surface to ensure your home is move-in ready.
This is mandatory for mortgage companies. A thirdparty appraiser will determine the value of the home and share the results.
STEP 11
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It’s time to find out what your house is worth.
GET YOUR NEW APPRAISEDHOME
SIT TIGHT FOR PROCESSINGFINAL
By working to a 7 day processing goal*, we can have closing documents out weeks before closing and avoid any last-minute craziness.
STEP 12
*While it is Movement Mortgage’s goal to provide seven day processing, extenuating circumstances may cause processing delays outside of this window.
After your bid is accepted, the underwriter will verify that all conditions previously requested are taken care of.
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*While it is Movement Mortgage’s goal to provide closing in 1 day, extenuating circumstances may cause underwriting delays outside of this window.
STEP 13
Who is involved: closing team, escrow, title company, notary and, in some states, the buyer’s and seller’s attorneys.
The “closing” is when you sign all the documents with a notary and wire the final funds to escrow. After all is settled, we’ll make sure that your loan is funded so you’re ready to enjoy your new home.
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Once all conditions are met and loan processing is complete, our goal is to be ready for closing in one business day*.
GET READY TO CLOSE
Welcome24 home! Head to the Movement blog for tips on moving and setting up your home (blog.movement.com).
MOVE IN
STEP 14
ARE YOU READY TO BE A HOMEOWNER?
When you’re ready to get started, simply visit: www.movement.com
Feel free to reach out if you have any additional questions to get you started towards homeownership!
We’re here to help you move home.
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WWW.MOVEMENT.COM
Movement Mortgage, LLC supports Equal Housing Opportunity. NMLS ID# 39179 (For licensing information, go to: www.nmlsconsumeraccess.org) | 877-314-1499. Movement Mortgage, LLC is licensed by AL # 21022, AK # AK39179, AZ # 0918544, AR # 105002, CA Department of Business Oversight under the California Residential Mortgage Lending Act # 4131054, CO # 39179, CT # ML-39179, DE # 012644, D.C. # MLB39179, FL # MLD1360, GA # 23002, HI # HI-39179 & MS205, ID # MBL-8027 & RRL-9397, IL # MB.6760898, IN # 18121, IA # 2013-0023 & 88883410, KS# MC.0025343, KY # MC85066, LA, ME # 39179, MD # 19094, MA Broker & Lender # MC39179, MI # FR0021343 & SR0020189, MN # MN-MO-39179, MS# 39179, MO # 18-2096, MT # 39179, NE, NV # 3401, NH # 20985-MB, Licensed by the N.J. Department of Banking and Insurance, NM, Licensed Mortgage Banker-NYS Banking Dept. #B500997 & B501039, NC # L-142670, ND # MB103223, OH # RM.804187.000, OK # ML002646, OR # ML-5081 & MS-37, PA # 34374, Rhode Island Licensed Lender, Broker and Servicer 20153194LL & 20153195LB & 20153196LS, SC # MLS - 39179, SD # ML.05007, TN # 112748, TX, UT # 7773921, VT # 6862, 39179-1 & 1288 MB, VA # MC-5112, WA # CL-39179, WI # 39179BA & 39179BR, WV # MB-32019 & ML-32020, WY # 3104 & SL-3790. Interest rates and products are subject to change without notice and may or may not be available at the time of loan commitment or lock-in. Borrowers must qualify at closing for all benefits. “Movement Mortgage” is a registered trademark of the Movement Mortgage, LLC, a Delaware limited liability company. 8024 Calvin Hall Rd, Indian Land, SC 29707. PID2895.1 | AO0822