The Home Buying Process in St. Louis, MO 
BY: KIARA JOHNSON
If you have ever purchased a house in the past, I assure you that today’s home buying process is much different.
In today’s world, lenders ask for so much information that you will probably wonder if you even want to proceed with buying a home. This is a common feeling, but rest assured that someone with a 600 credit score will still need the same documentation as someone with an 850 credit score.
This article is to enlighten you on documents your lender will request, why they are requesting them and other significant milestones throughout the process.
Congratulations! Your contract has been accepted, meaning you have made an offer on a home and the seller has agreed to the terms and conditions that you and your realtor have outlined in the contract. The first important date is your acceptance date. This is a date that the contract is accepted. From that date, you have typically 24 hours to provide your earnest money to your agent. Earnest money is the pre-negotiated amount that you put down in advance to show the seller that you are serious about purchasing this property.
Also, from this date, it is essential that you sign your “Intent to Proceed” with your lender. The Intent to Proceed form says that you have chosen that lender to work with on the purchased of the specified property. Without this form being signed, your lender is limited on what they can do with the file. They cannot order the appraisal or request certain documents in order to get the loan process moving.
Another milestone date that buyers should be aware of is your inspection period. Typically, unless otherwise stated, you need to have your inspections completed within ten days of the acceptance date. This includes, but is not limited to, your building and pest inspections. During this ten-day window, it is also important to call insurance carriers to make sure the property is insurable. Any concerns should be drawn up in an inspection report which your realtor will send over to the seller to see what issue(s) they may or may not be willing to address.
Simultaneously, your loan coordinator is working hard on preparing the file for underwriting. Your loan coordinator will be your primary point of contact outside of your loan officer. As a lender, we want to make sure you will be able to make your payments, so we need to verify sources of income. Whether that may be from a job were you receive paychecks, self-employed income, or even fixed income. We will typically collect a month worth of pay stubs, two years federal tax returns, W2’s and/or 1099’s. You would think that would be enough to prove your income, right? The answer is “No.” Behind the scenes, we are calling your employer to verify the information you provided and contacting the IRS to verify your tax returns were filed identically to what you gave us. This is not done out of choice on the lender’s part but because the guidelines require it.
When we run your credit report, we will ask you to explain or provide documentation on any derogatory information. This includes bankruptcies, judgments, charge-offs, late pays, etc. We will also have you explain any inquiries to your credit within the past 6 months. We want to make sure we have an accurate picture of your debts and liabilities so that we are meeting mortgage lending guidelines. There are times where credit accounts will not report to the credit bureaus. When that is the case, we need to know about those accounts from you.
We also require asset statements. Not only for the accounts that will be used for closing; but for all your asset accounts. Sometimes the difference between your loan being approved or denied can be that little extra money you have in a 401K or investment account that can be used for reserves. We will also ask you to document and support deposits that aren’t payroll. We will request information that may be specific to your financial situation. This may include divorce decree or separation agreement, job gap explanations, and unfortunately much more.
There will be times were you provide everything requested and we still come back and ask for more. How frustrating! Most likely, the information you provided triggered for more questions or documentation for clarity. It can be an emotional roller coaster but keep in mind, we are all on the same team with the same end goal- to get you into the home of your dreams.
After all that has been squared away, we have loan commitment. This may be the most important date for the lender, realtor, and seller. This is the date that you are contractually obligated to provide loan approval. Most loan commitments will have a few conditions on them such as a 24-hour verbal verification of employment, 24-hour credit soft pull, or finalize insurance. These items are nothing to worry about.
The most exciting date for all parties involved is your closing date. This is the day you receive the keys to your new home- which is exciting, and it’s also the day you sign a significant amount of paperwork- which may be less exciting.
Call Kiara Johnson at 314.568.6389 to get pre-approved and learn about all of the mortgage options you qualify for. I can also be reached by email at kjohnson@firstintegrity.com.