STEPS TO PURCHASING A HOME
1. PRE-QUALIFY FOR A LOAN:
Many lenders will accept your loan application and begin processing the loan for only the cost of a credit report, usually under $25. Pre-qualifying will:
- Tell you how much house you can afford to buy.
- Get your CERTIFICATE OF ELIGIBILITY ordered or updated.
- Check your credit, and begin repairs if necessary.
- Keep you from looking at a home you cannot afford.
- Home sellers and their realtors will look favorably on your offer because they can be confident that your loan will go through.
- If your credit report is in and your ELIGIBILITY CERTIFICATE is ordered, your loan will close much faster.
2. LOCATE A REALTOR IN THE AREA YOU WANT TO LIVE IN:
As a purchaser, the Realtor works for you FREE (since the seller pays the commission). Certain Realtors will also help you with your closing costs. If a Realtor wants money from you to find you a home, RUN, don’t walk, to another Realtor!
3. WRITE A CONTRACT ON THE HOME YOU WANT:
Your Realtor will prepare this for you. VA contracts contain a clause called the “VA ESCAPE CLAUSE” which protects your EARNEST MONEY if the house does not appraise for the purchase price.
4. APPRAISE THE HOUSE:
A VA approved appraiser will now determine the value of the home. He will note any obvious repairs that need to be done to bring the house up to VA STANDARDS. The VA then reviews his work to further safeguard your interest and issues a VA Certificate of Reasonable Value.
5. LOAN APPROVAL & CLOSING:
VA or a lender’s underwriter approved by VA now issues the final approval and the loan closing is scheduled. You will sign many papers, all approved by the VA. The lender and Title Company are limited in the closing costs; they can charge you. The VA will not let them charge UN-allowable closing costs. This does NOT prevent them from charging you too high an interest rate.
6. MOVE IN:
Congratulations! You have taken a major step toward financial freedom and wealth building.
OPM—THE SECRET TO WEALTH BUILDING
OPM stands for OTHER PEOPLES MONEY. If you borrowed $150,000 to purchase a home, you have $150,000 of someone else’s money working for you. If your home goes up 5% in value each year, you are getting richer by $7,500 per year or $625 per month! PLUS, now your gains compound!
EXAMPLE: 5% yearly appreciation on a $150,000 home over a 30-year period.
5th year: $191,442
10th year: $244,334
15th year: $311,839
20th year: $397,995
25th year: $507,953
30th year: $648,291
MORE INFORMATION ON HOME LOANS