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MORTGAGE KNOWLEDGE CENTER

PenFed Mortgage with Confidence

Home Buying Steps

  • Getting Started
  • Finding a Home
  • Getting a Mortgage
  • Home Ownership

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CONVENTIONAL LOANS

Rates starting at % (APR %)¹

 

Apply before becoming a member.

After your application, we’ll help you:

1. Discover you’re eligible to become a PenFed member

2. Open a Savings/Share Account and deposit at least $5

  1. Home
  2. Mortgage Knowledge Center
  3. How To Speed Up the Home Buying Process

MORTGAGE

How To Speed Up the Home Buying Process

What You'll Learn: Learn the Top Tips for Speeding Up the Process of Buying a House

EXPECTED READ TIME: 6 MINUTES

November 12, 2021

Although the home buying process has many steps, it only has a few key players. Who’s on your team has a significant impact on the speed of the home buying process and whether your experience is good or bad. In addition to who’s on your team, your preparedness is key. When you come into the process organized and with correct expectations, you’ll have a much better chance of success. Read on for our top tips for speeding up the buying process.

Estimating the Home Process Timeline

Depending on who you talk to, the home buying process can take between three to six months. Of course, it varies depending on whether it’s a buyers’ or a seller’s market and the location you’re buying in. But there are specific ways you can make your journey to buying a home as quick as possible.

Work with an Excellent Lender

One of the most significant parts of the home buying process is financing. If you can’t get the financing, or if you can’t get it in time, you won’t be able to buy the home you want.

When shopping for a lender, keep rate shopping in perspective. You’ll not only want to get the best possible rate, but you’ll also want to make sure the customer service is good. Having a low quoted rate is a moot point if the lender can’t close on time. So, balance the two – low rate and customer service.

Have Correct Expectations

Be realistic about how much documentation you’ll need to supply. If you’re a first-time homebuyer, or if you haven’t bought a home for several years – you may be surprised by the amount of information you need to supply. Ever since the real estate crash of 2008, where so many homes were foreclosed on, lending has tightened up. Every aspect of a borrower’s income, credit profile, and assets is reviewed with a fine-tooth comb.

At first, you’ll submit the main documents needed. Once your file goes to the underwriter, they will likely have questions and require more documentation. Be flexible. Know you’ll probably be providing information and documents up until the day of the close.  And sometimes, you might have to submit the data more than once. Just give your lender whatever is needed right away, and you’ll be fine.

Consider the loan process like a cross-country flight from California to Florida. At the beginning of the flight, your pilot will tell you the weather and your estimated arrival time. They will most likely tell you there could be some turbulence as you go over mountain ranges and approach Florida. That way, when there’s turbulence, you’re not surprised. When those bumps happen – you say to yourself, “this is normal, don’t stress.” Your plane lands, and when you leave the plane, you tell your pilot they did a great job!

The same is true for getting a mortgage loan. It’s not uncommon for there to be a few bumps along the way. So ­– don’t get nervous. Every loan is different, but in most cases, the underwriter has questions they’ll need clarification on. Some loans have issues not with the borrower but with the property. For example – maybe the appraisal came in low, or the roof won’t last another year. The best thing to do is not to expect a completely smooth ride. There are many moving pieces to a loan, and most have some issues that need to be addressed along the way. That’s why it’s imperative to have a lender you can trust to get you to close.

Have Your List of Needed Documents

As soon as you apply for a mortgage, your loan officer will give you a list of documents they need. Here are some of the most commonly requested items for income:

Wage Earners

  • W2 – last two years
  • Paystub – two most recent

Self-Employed

  • Taxes – last two years taxes personal and business
  • Year to date profit and loss
  • 1099s

Retired

  • Social security awards letter
  • Pension awards letter

You’ll also need to show your assets.

  • Checking and savings accounts – most recent two months
  • Retirement accounts – most recent two months

If you receive some or all of the down payment as a gift, you’ll need a gift letter. There are probably other documents you’ll need. Your loan officer will let you know what they are.

Get Your Financial Documents Organized

Once you start the home buying process, get your documents together. You’ll want to create two folders. One on your computer and one hard copy folder.

Computer folder – save it where you’ll be able to find it easily. Put all of your documents in this folder, and carefully save each form, so you’ll know what it is without having to open it. For example:

  • W2-2020
  • W2-2019
  • Paystub June-1-2021
  • Paystub June-7-2021
  • Checking May-2021
  • Checking April-2021
  • Social Security Awards Letter-2021
  • Personal taxes-2020
  • Business taxes-2020
  • P & L Jan – May-2021

When you take the time to save your documents in this format, if you need to resubmit anything, it’s easy to find. Many of your documents will already be PDFs—for example, your bank statements. But if you’re self-employed, you’ll need to scan your taxes to upload to your lender. That is unless you take them into their office.

Hard copies – consider keeping paperwork close at hand. Especially if you are self-employed and need to submit your taxes. And whatever you do – don’t pack them before your loan closes and you have the keys to your house! If you need them at the last minute, you don’t want to be looking through boxes on a moving truck.

Have Your Down Payment & Closing Costs Funds Ready

For almost every type of mortgage, you’ll need a down payment. Here’s how much of the purchase price you should save:

  • VA – 0 down
  • FHA ­– 3.5% down
  • Conventional ­– 3% to 10% or more down

If you’re getting a gift from a relative, employer, or close friend, you’ll also need a gift letter. Your loan officer can help you with that.

In addition to the down payment, you’ll also need closing costs that run between 2-5% of the property's purchase price.

Tax Returns

You may need to provide your tax returns. If you’re self-employed, have them filed and ready to submit. You’ll need to either upload them or bring them to your lender. If you’re scanning and uploading, make sure you scan every page – even the blank ones.

Once you’re done scanning, keep your returns together and close at hand in case they’re needed again.

Avoid These Common Pitfalls

All during the home buying process and especially once you’re in escrow, it’s important to maintain your financial position and avoid mistakes. That’s because you’ve been prequalified based on your credit report, amount of debt, number of credit accounts, and money in your bank accounts. Applying for more credit or increasing the amount you own could mean you won’t qualify. So that means:

  • No charging new furniture, TVs, drapes, blinds, etc.
  • No buying and getting a loan for new vehicles
  • No buying and getting a loan for new boats or ATVs
  • Don’t have your credit pulled by anyone else
  • Don’t drain your savings either. Wait until you have the keys to your new place, then you can do whatever you want.

In addition to keeping your credit and financial information the same, here are a few more tips.

  • Don’t change jobs while you’re in escrow
  • Don’t reduce or vary your hours while you’re in escrow

Have Realistic Market Expectations

Just as getting your financing in place is important, it’s also imperative to have realistic expectations regarding the market. For example, if you’re buying in an extremely competitive market, don’t ask your realtor to put in a low offer. And if you find a home you’re interested in a hot market, be ready to put in an offer right away.

Additionally, do some homework on your own to save time. If there’s a property you’re interested in, you might do a quick drive-by to see if it’s an option before you have your agent ask to see the inside. Watch new listings on Zillow, Realtor.com, Redfin, and Trulia, and let your agent know if you find a possibility.

Find the Right Realtor for Your Needs

Almost as important as finding the right lender, is working with the best real estate agent for your situation. Here are some things to look for:

Availability

When you’re looking for a real estate agent, one crucial factor is agent availability. That’s very important in a seller’s market where bidding wars are the norm. Think before you commit to someone part-time that is hard to reach.

Experience

Working with a realtor who has direct experience or a new agent with a hands-on broker is vital in any market. For example, in a buyers’ market, you’ll need someone who can negotiate the best offer and getting as many needed repairs done and paid by the seller as possible.

In a seller’s market, your agent needs to show how your offer is superior to other buyers.

Knowledge & Familiarity

No matter what areas you’re shopping in, try and find an agent specializing in those locations. For example, if you’re looking at a gated community – work with a realtor who knows the different neighborhoods and can guide you towards the best valued properties.

Works Well with Others

Having a good realtor means they can keep the purchase moving along. For example, once the appraisal comes back, if it's low, negotiations will need to occur. Or after the home inspections are done, who pays for any repairs will need to be decided. Being able to keep everything moving along regardless of what comes up is the mark of a professional.

Sometimes realtors have specific lenders they like to work with. And lenders can have their favorite realtors too. But as the borrower, it’s essential that you select the lender and the real estate agent that fits your needs the best. Once you choose your team, introduce them to each other. Selecting the best team possible will make your entire home buying process a success. Good luck in your homebuying journey!

For more information about PenFed Mortgages:
 

PenFed Mortgage: 

800-970-7766

Get Started

SIMILAR ARTICLES

What are the Steps to Buying a Home? Part 1

If you are a first-time homebuyer, there is a lot to think about. PenFed Credit Union takes you through the steps of what you need to know before buying a home.
man researching homebuying on laptop

Tips on How to Get an FHA Loan

See our tips for getting an FHA loan, what to do if you have not established credit, do not have down payment money, or have property problems.
handing keys to first time homebuyer

Tips for Buying a Home in the Summer

Is summer the best time of year to buy a home? Are more houses for sale in summer? Get these answers and more. Read on for our top summer home buying tips.
house in summer

What Will a Mortgage Cost You?

There are a lot of costs involved with a mortgage. Learn what they are, what will affect them, and what to keep in mind when you shop for a new mortgage.
Couple looking over documents
image

CONVENTIONAL LOANS

Rates starting at % (APR %)¹

 

Apply before becoming a member.

After your application, we’ll help you:

1. Discover you’re eligible to become a PenFed member

2. Open a Savings/Share Account and deposit at least $5

Home Buying Steps

  • Getting Started
  • Finding a Home
  • Getting a Mortgage
  • Home Ownership

Mortgage Topics

  • VA Loans
  • Conventional Loans
  • First Time Homebuyer
  • Home Equity
  • Homebuying 101
  • Checklists
  • Adjustable Rate Mortgages
  • PenFed Top 10
  • Refinance
  • Jumbo Loans
  • FHA
  • Videos

Mortgage Products

  • Mortgage Center
  • Refinancing
  • Home Equity

PenFed HELOC

Rates as Low as % APR* with flexible use of funds

Apply before becoming a member.

After your application, we’ll help you:

1. Discover you’re eligible to become a PenFed member

2. Open a Savings/Share Account and deposit at least $5

Disclosures

1Except for holidays, rates are updated Monday through Friday at 10:15am EST. The advertised rates and points are subject to change. The information provided is based on discount point, which equals percent of the loan amount, and assumes the purpose of the loan is to purchase a property with a 30-year, conforming, fixed-rate loan. Loan amount of $400,000; loan-to-value ratio of 75%; credit score of 760; and DTI of 18% or less. The property is an existing single-family home and will be used as a primary residence. The advertised rates are based on certain assumptions and loan scenarios, and the rate you may receive will depend on your individual circumstances, including your credit history, loan amount, down payment, and our internal credit criteria. Other rates, points, and terms may be available. All loans are subject to credit and property approval.

*Prime Rate is % as of . The APR for this Home Equity Line of Credit (HELOC) is based on prime plus a margin and can change monthly. Fixed Rate Advances will be amortized over the Fixed Rate Advance Term, with the payment consisting of principal and interest. Your Annual Percentage Rate for a Fixed Rate Advance will be calculated by adding your Prime Rate, your Margin, and the Additional Fixed Rate Lock-In Margin. Your Annual Percentage Rate for a Fixed Rate Advance shall not exceed 18% and shall be equal to or greater than % for primary residences and second homes.

  • Annual Fee: Notwithstanding the foregoing, an annual fee of $99 will be assessed on each account anniversary.
  • Home equity lines of credit (HELOC) are variable rate loans and the interest rate is subject to increase after consummation of the loan on monthly basis. Closing costs range between $500 and $8,500 for credit lines of $500,000. Contact a representative for additional details.

Appraisals: PenFed will attempt to establish value via an independent method. If that method is unsuccessful, or the value is not sufficient for the amount requested, an appraisal will be required regardless of CLTV. An appraisal is always required in the following circumstances:

For all loans with a loan amount greater than $400,000.

If an appraisal is required, it must be ordered by PenFed. You will be contacted for authorization and payment prior to ordering. Appraisal fees average $550 to $850 (some run higher).

  • Closing Cost Credit: PenFed will pay most closing costs associated with a home equity line of credit (HELOC), which includes credit report, flood certification, settlement/closing, property ownership and encumbrances search, recording, property search, and quick close. Member is responsible for any city, county, and/or state taxes if the subject property is located in FL, LA, MD, MN, NY, TN, or VA. If an appraisal is required, the member, who is responsible for the fee whether or not the loan closes, will pay the cost.

Interest may be tax deductible, consult a tax advisor for further information regarding the tax deductibility of interest and charges.

Fixed Rate Advance Lock-In You may lock in an Annual Percentage Rate for Advances during the Draw Period. During your Draw Period, you may choose to have three separate Fixed Rate Advances locked in at any one time, with a maximum of two new Fixed Rate Advances per calendar year. Each Fixed Rate Advance must equal or exceed Ten Thousand Dollars ($10,000.00) and you may not request a Fixed Rate Advance that would cause the amount you owe to exceed your Credit Limit. The only term option for your Fixed Rate Advance is 240 months (“Fixed Rate Advance Term”). However, the term of your Fixed Rate Advance cannot exceed your Repayment Period.

Fixed Rate Advances will be amortized over the Fixed Rate Advance Term with the payment consisting of principal and interest. Your Annual Percentage Rate for a Fixed Rate Advance will be calculated by adding your Prime Rate, your Margin and the Additional Fixed Rate Lock-In Margin. Your Annual Percentage Rate for a Fixed Rate Advance shall not exceed 18% and shall be equal to or greater than % for primary residences and second homes and 4.75% for investment properties.

Property Insurance: Property insurance is required.

Multiple PenFed Loans: Multiple PenFed Equity loans and HELOCs are available as long as the member and collateral qualify (except Texas). For Equity loans and HELOCs the total indebtedness cannot exceed $500,000 for all PenFed Equity and HELOCs combined.

PenFed does not lend on:

  • Mobile homes
  • Co-ops or time-shares
  • Properties that are currently listed on the market for sale
  • Commercial property or property used for commercial purposes, even if a residence is part of the property
  • Undeveloped property (land only)
  • Properties with more than 4 units

Properties that are currently under major construction/renovations: Property must be fully livable, with no safety issues. (Examples: no missing rails from stairs/decks, no open walls with wires showing, missing kitchen appliances/counters, missing bath fixtures or unfinished pool).

  • Additional limitations may apply

Home Equity Line of Credit:

  • This Account has a Draw Period of 10 years, followed by a repayment period of 20 years.
  • If only minimum payments are made during the draw period, the loan balance will not decrease.
  • In Texas, the maximum CLTV available is 80% on owner occupied properties. Additional restrictions apply in Texas, so please ask a representative for details.
  • In all other states, the maximum CLTV is 85% on owner occupied properties and second homes. Additional restrictions or requirements may apply based on application characteristics.
  • Property type of Condo has a maximum CLTV of 80%.
  • The maximum CLTV available is dependent on credit qualification.
  • Rates vary depending on owner occupancy and CLTV and other loan criteria.

Minimum Loan Amount Requirements in all States:

  • For an owner occupied property or second home the minimum loan amount is $25,000 and the maximum amount is $500,000 with a CLTV of 85% or less of the fair market value.

Other terms and conditions apply; call 844-918-4307 to speak with a representative for details. All rates and offers are subject to change without notice. To receive advertised product, you must become a member of PenFed.

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This credit union is federally insured by the National Credit Union Administration. Rates are current as of December 2023 unless otherwise noted and are subject to change.

APY = Annual Percentage Yield
APR = Annual Percentage Rate


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IMPORTANT NOTICE

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The content you are about to view is produced by a third party website that is unaffiliated to Pentagon Federal Credit Union. PenFed takes no responsibility for the content of the page.


IMPORTANT NOTICE

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For more information about the relationship between PenFed and PenFed Title, LLC, see the Affiliate Business Arrangement Disclosure.


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