Once you’ve decided to become a homeowner, it is time to start the home buying process. If this is the first time you’ve bought a home, the whole process might seem intimidating, but you are certainly not alone. You will encounter numerous professionals along the way whose goal is to help you get to the closing table and successfully sustain homeownership. Here is a list of the key professionals and the role that each of them has in your home buying process.
1 – Loan Officer
At the beginning of your homebuying journey, you will want to speak to a loan officer to discuss your eligibility for a mortgage loan. A loan officer will evaluate your credit and financial information and recommend home loan programs that will meet your current financial circumstance and long-term financial goals. Getting pre-qualified for a loan before you start housing hunting is important because you will have a realistic budget that a mortgage lender is prepared to finance for your home purchase. Additionally, loan officers can help to identify any red flags in your credit and finances.
The mortgage lender is the financial institution that finances your mortgage. It could be an independent mortgage lender, bank, or credit union. Your loan officer represents the mortgage lender for the process of obtaining your home loan, and will be your day-to-day contact during your home loan application process. The loan processor and underwriter will likely work for the mortgage lender, too.
2 – Real Estate Agent
Finding the perfect home can be difficult with so many options to choose from, but a real estate agent will help you identify what you need versus what you want and help you find a home that meets these criteria. They will notify you of various home listings and schedule open house visits. These agents are licensed professionals that will advise you of all the characteristics to look out for when searching for a future home. Once you find the right home for you, your real estate agent will pull comparable recent sales in the area to formulate an offer price. They will guide you through the paperwork to buy your home.
3 – Loan Processor
A loan processor is the person responsible for reviewing the mortgage loan application to ensure sure the borrower has provided all the necessary paperwork and double-checks all your personal information and financial documents to ensure it is correct before they submit it to the underwriter for a decision. They contact any necessary third parties (like your employer to verify your employment and income or the credit reporting agency to pull your credit report) for verification.
4 – Underwriter
The underwriter’s role in the home buying process is to review your mortgage application. Your credit history, income, and capability of repaying a loan all need to meet the home loan program’s requirements to be approved.
5 – Home Appraiser
Once you have negotiated a final sales price for the home, the next step is to notify your loan officer that you are ready to proceed with your full mortgage application. The mortgage lender will contact a home appraiser to determine the current market value of your future home. The home appraiser checks the market value. The market value is a comparison of your home with other homes in the same area. They also calculate the worth, the cost of building the home and any improvements needed, and the home depreciation. The report from the home appraiser goes to the lender to determine the price for the property. If the appraised value comes in lower than the offer amount for the home, your real estate agent can negotiate with the seller to reduce the sales price, or you will need to pay the difference. You can also decide not to purchase the home and look for another.
6 – Home Inspector
Touring potential homes only allows you to see what the seller wants you to see. There could be underlying issues within the home that you would never know existed just by touring. A home inspector’s job is to examine the home’s structure, such as the roof, walls, floors, doors, windows, basement, or crawlspace. They will also check the home systems, such as electrical, plumbing, heating, and cooling. After the inspection, they will provide you a full written report of the condition of the home. You can discuss with them any questions or concerns about repairs or replacements. The home inspection report will help determine the final offer on the home. Your real estate agent may be able to negotiate with the seller a price reduction to cover repairs or have the seller complete the repairs before the sale is completed.
7 – Title Agent
A title agent’s role is to provide a legal description of the home, identify the property’s current and rightful owner, and point out any suspicious changes in ownership of the property. The property’s title provides ownership history, boundary lines, and permitted use. The verification of the property’s title will prevent you from incurring any legal fees that could result from questions about who owns the property. Your mortgage lender will usually engage with a title company to do this on your behalf, so they can be sure you have a clean title before purchase.
8 – Home Insurance Agent
It is essential to protect your new home, and your mortgage lender will require a home insurance policy that covers the value of your home. There are a variety of homeowner insurance plans. Many cover the cost of entirely rebuilding your home and replacing contents in case of fire or other severe damage. If your home is in a flood zone, you will need to take out additional home insurance. The home insurance agent will recommend an insurance policy that meets your needs.
9 – Closing Agent
When it is finally time to close your new home, the person handling the transaction is the closing agent. The closing agent acts as a liaison between you and the seller. They verify that all documents are signed and that the payments are correctly transferred. Afterward, a closing agent makes sure the sale of your new home is correctly recorded and filed for the title company.
10 – Mortgage Servicer
The role of a mortgage servicer is to track your overall loan payments. They receive and process the monthly payments you make towards paying your loan off. In some cases, your mortgage lender is also your mortgage servicer. Your loan officer can confirm if their mortgage company services their home loans or has another company do it.
