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Ten StepsSTEPS FOR PURCHASING A HOME THROUGH NACAThis section describes the steps for purchasing a home through NACA. If you follow these steps, you will become a homeowner. The more preparation you do, the sooner you will be able to purchase your home. The overview below is followed by a detailed description of each step.Ten Steps Summary and Details (PDF) Step 1: Homebuyer Workshop - Step 1 Details (PDF) Attend a Homebuyer Workshop. There are a number of workshops each month and you can sign up online or by phone. The Homebuyer Workshop will provide you with an overview of the home buying process and NACA?s Best in America Mortgage Program. Upon completion of the Homebuyer Workshop you are now considered a NACA Member and can schedule an appointment to meet with a NACA Housing Consultant.
Step 2: NACA Approval - Step 2 Details (PDF) To become NACA Approved, you must work with the Housing Consultant to obtain the necessary documents and information, and to address any roadblocks to the home purchase. It is important that you bring the documents identified in ?Items Required for NACA Approval.? At your first meeting, the Housing Consultant will answer your questions concerning NACA, discuss the issues related to homeownership and begin the approval process. This is likely to be the most time consuming process, where future issues and potential problems need to be addressed. Patience and diligence at this stage will help prevent future delays and potentially devastating problems.
To become NACA Approved, your Housing Consultant will work with you to become NACA Qualified in the following areas:
You will remain NACA Approved as long as your financial circumstances do not change. If you do not submit a mortgage application within three months of being NACA Approved, you will need to re-certify your approval by working with your Housing Consultant to update your information and documents.
Step 3: Payment Qualification Increase - Step 3 Details (PDF) You will be qualified for a maximum monthly payment in Step Two (usually similar to your current rent). If you would like to purchase a house that requires a larger payment, you will need to demonstrate that you can afford it. The Housing Consultant will evaluate your expenses and savings pattern, and may request that you increase your savings for three to six months. He or she can help you chart a plan to prepare for a higher payment. Remember that the romance of the new home will wear thin if you have to struggle each month to make the mortgage payment. While you work on increasing your qualification amount, you may want to begin searching for a home.
Step 4: House Hunting with Buyer?s Agent - Step 4 Details (PDF) Once you are NACA Approved and meet your desired maximum payment goal, you will need to attend a Purchase Workshop or meet individually with a Housing Consultant. You will receive your NACA Approval Letter and Form and can begin searching for the home of your dreams. It is at this time you will be assigned to your referring agent or be given access to the NACA Buyer?s Agent. Whereas most real estate agents represent the interests of sellers, NACA?s real estate agents work for you. If you choose to have a NACA Buyer?s Agent or Referral Agent assist you in your search, you will meet to discuss where you wish to live, what type of house you want, the price range you are considering and other issues of concern to you. He or she will then locate suitable properties and research properties that you identify on your own. He or she can also help you determine what renovations might be necessary and whether it can be rolled into your NACA rehab loan. Step 5: Purchase & Sale Contract - Step 5 Details (PDF)
When you identify the house you want to purchase, your real estate buyer?s agent will negotiate on your behalf. They can advise you on the amount to offer, but you must decide if the property is right for you at that price. Before proceeding, you need to verify with your Housing Consultant that the brokers/agents, sellers and others involved in the transaction are eligible to work with NACA. You also need to check whether your maximum purchase price has changed due to interest rate shifts. Finally, the purchase must be conditioned on a satisfactory inspection by a NACA approved home inspector.
The Purchase and Sale Agreement (P&S) is the most important contract?it binds you and the seller to execute the transfer of ownership at an agreed price with specific terms. Although your Buyer?s Agent will assist you in negotiating it, you must carefully consider whether to go forward with the agreement and sign it. The P&S should provide you at least four weeks to obtain a mortgage commitment (more time than is usually needed).
Step 6: Property Condition and Renovation - Step 6 Details (PDF) You need to hire a NACA approved home inspector to inspect the property and provide you with a written report, which contains valuable information such as necessary or future repairs, utilities and energy efficiency. This will help you avoid a house with serious problems or unpleasant surprises. The inspection could affect the amount you wish to pay for the house. If repairs are needed, they must either be made by the seller or included in the mortgage. NACA also provides financing for desired renovation. If renovations prevent you from moving into the property, the mortgage payments for the first six months will be deferred (incorporated into your loan) and your monthly payment will not increase.
Step 7: NACA Credit Access - Step 7 Details (PDF) After you and the seller negotiate and sign the Purchase and Sale Contract, give a copy to your Housing Consultant along with a complete real estate package and any required updated financial information. You will need to apply for NACA Credit Access before submitting a mortgage application to a Participating Lender. NACA will review your updated documents and the P&S to determine whether you meet NACA?s requirements and procedures.
Step 8: Mortgage Application & Processing - Step 8 Details (PDF) Your Housing Consultant can often complete a mortgage application with you at the same session as your application for NACA Credit Access. There is a wait while the lender considers your loan application, but the process is usually expeditious because of all the work done at the NACA Approval stage. In addition, NACA?s state-of-the-art paperless mortgage software expedites the process. The lender may request additional information or explanations and will appraise the property. You will receive a number of documents from the lender, including the Truth-In-Lending Statement and Good Faith Estimate, which you need to sign and return.
If all goes well, you will receive an approval letter from the lender, which may include conditions that must be met before you can close on the loan (this may vary by lender). Your Housing Consultant can help you respond to these requests and/or conditions. While you wait for the approval letter, you should begin looking for homeowner?s insurance.
At least three days before the closing, you must buy one year of homeowner?s insurance, proof of which is required at closing. You must also do a ?walk-through? of the property just prior to closing to make sure that there is no new damage, that the property is vacant and clean, and that the owner has made any agreed upon repairs.
Step 9: Mortgage Closing and Issues for New Homeowners - Step 9 Details (PDF) NACA and the Closing Agent will coordinate your closing at the NACA office. You should be told prior to the closing how much your pre-paid expenses will be. You will need to bring a certified check, made out to the settlement agent, for the pre-paid expenses and escrows. Just prior to the closing examine the property to make sure all arrangements involving repairs, tenants, cleaning, etc, have been followed.
Your closing at the NACA Office will involve you and any co-borrowers, as well as the seller, the lender?s attorney or settlement agent, your attorney (if applicable), your real estate agent, and the listing broker. You will have to sign a mortgage, a promissory note, and many other papers. If you have any questions, your real estate agent, Housing Consultant or another NACA Staff person can help to answer them. At the end of the closing, you will own the property and receive the keys. CONGRATULATIONS!
Step 10: Post-Purchase Assistance - Step 10 Details (PDF) Post-Purchase Assistance
NACA provides comprehensive post-purchase counseling and financial assistance via the Neighborhood Stabilization Fund (NSF). The NSF provides emergency assistance to prevent foreclosure as well as financial counseling, landlord training and other assistance.
Making the transition from renting to owning may require significant sacrifices and changes in your spending habits. You will probably incur higher utility costs than in an apartment. You will no longer be able to rely on a landlord to arrange necessary repairs. You will need to make your mortgage payments on time?if you miss a payment the lender will expect two payments the next month. Although your NACA Housing Consultant will discuss these issues with you throughout the NACA Approval process, post-purchase counseling may be needed to help you adjust to the financial responsibilities of being a homeowner.
REMEMBER TO PARTICIPATE
Copyright NACA2005 For information about the NACA program, contact service@naca.com. |
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