Steps to Buying a Home

You may qualify for more than you want to spend. Talk to a mortgage advisor about what you are comfortable spending, and how to determine your next steps, including:

Prequalification

• To get prequalified, you will need to provide your basic debt, income and asset information; we will obtain your credit report
• By the end of your conversation with your advisor, you'll know how much you prequalify for and how much you can afford

Identify your home expenses

• Owning a home often includes expenses you don't have to deal with as a renter, such as:
  1. Taxes
  2. Utilities
  3. Emergency repairs
  4. Maintenance costs
• Use this checklist to determine your monthly and long-term expenses so you can factor them into your budget as a new homeowner

Know your home loan options

• Research the mortgage options available and which works best with your budget and home-buying goals

Call a TD Bank mortgage advisor at 1-800-822-67611-800-822-6761 to talk about which mortgage is best for you.

• Get your credit report
  1. Request a free copy of your credit report* from all 3 major consumer reporting companies and read them carefully
  2. Notify the companies of inaccuracies that may negatively affect your credit score
• Don't make any major purchases
  1. Hold off on making any big purchases, such as a car or furniture, until after your closing
  2. Taking on significant new debt now can impact your mortgage loan decision and how much you can borrow
• Start saving pay stubs and other documentation
  1. Start collecting the documents you may need to apply for your mortgage

Applying

What you do:

• You will need a signed purchase and sale agreement to start your application
• Gather all documentation, such as personal identification, financial and income information, etc.
  1. If you are building your home, you'll need to have a signed construction or purchase contract with your builder or developer, and it should include – contract amount, cost of construction and land (if applicable) and construction start and completion dates

What we do:

• Work to give you a conditional decision within 24 hours of submitting your application
  1. If you are conditionally approved, we will send you a conditional approval letter
• Contact you to review your loan conditions, documentation and next steps
• Provide you with a Loan Estimate of your closing costs within 3 business days of submitting your application
• Schedule a tentative closing date within 30–45 days of submitting your application

Processing

What you do:

• Send us any additional requested information by the date on your conditional approval letter

What we do:

• Process your application (once we have all your documentation)
• Review your credit report
• Verify your information

Inspection

What you do:

• You or your real estate professional arrange for a home inspection – the inspector will meet you at the property you are purchasing
• You may also choose to have additional tests done (air, water, pest, etc.)
• Pay the inspector and/or service providers directly at the time the service or test is completed (these expenses are not paid at closing)

Appraisal

What you do:

• Review the appraisal once it is completed and shared with you

What we do:

• Schedule a licensed appraiser to visit the property you want to purchase
  1. Once we receive the appraiser's report, we verify that your loan amount doesn't exceed the property's value
  2. A copy of the appraisal is included in your mortgage closing document and the appraisal fee is included in your closing costs
  3. Note: The appraisal process is different if you are building your home

Underwriting

What you do:

• Provide any additional information we need to finalize the review process

What we do:

• Our underwriter receives and reviews all the information provided and makes sure all the loan guidelines have been met
• Work with a title company to research the property's title and make sure the property is legally cleared for transfer of ownership

Closing

What you do:

• The closing agent will contact you with a closing date and time, and what you will need to bring to the closing (such as personal identification, check for closing costs, etc.)
• 3 days prior to your closing, you will receive the Closing Disclosure that will provide the final terms of your loan and the closing costs
• The exact amount you will be required to bring to closing will be on the Closing Disclosure. You will be instructed to get a certified check or a bank check for that amount – we will tell you whom the check should be made out to

What we do:

• Work with the title company and real estate professional to finalize and schedule your closing date
• Prepare all documentation for you to sign during your closing
• Help you finalize the purchase and get you in to your new home

When you've found the home you want, you'll need to enter into a written contract with a written offer. Working with a real estate professional can simplify this entire process. Your real estate agent will:

• Provide you with standard forms that comply with state and local laws
• Guide you on your offer amount based on comparable home sales in that area
• Present your initial offer and any counter offers to the seller and assist you with negotiations

The written offer includes:

• Purchase offer: This written proposal specifies the price you're willing to pay, as well as all the terms and conditions of the purchase
• Earnest money: This is money you put toward your new home with your purchase offer to show the seller your commitment to the offer (A real estate professional or attorney usually holds your earnest money and that money becomes part of your down payment, or is returned to you if your offer is declined)
• Negotiation: Your realtor can help prepare you for the back-and-forth with the seller on both the amount of your offer, as well as terms and conditions of the purchase
• Purchase agreement: Following any negotiation and modifications to your purchase offer, once a final price for the home is reached, you and the seller both sign off to create a final binding contract; this is the document you will need to start your mortgage application

Almost everyone who purchases a home has to put money down at the time of the mortgage closing. The amount of money you'll need will usually cover these fees and expenses:

• Inspections: You will likely have a home inspection, and possibly air, water and/or soil tests done on the new home; you will cover the costs for these and pay the service providers directly at the time of service
• Down payment: Typically ranges from 5% to 20% of the purchase price
  1. If your down payment is less than 20%, you may be required to purchase private mortgage insurance and, depending on your loan, you may be required to pay your first premium as part of your closing costs
  2. Talk to your mortgage advisor about options to pay for your down payment
• Closing costs: This includes fees paid to state and local governments, as well as bank fees associated with obtaining and originating your mortgage; closing costs typically are 2% to 6% of the loan amount
  1. Prepayments: You will have to make initial prepayments of any applicable real estate taxes and insurance, including homeowners, title, flood or private mortgage insurance
  2. Points: If you decide to pay points to secure a lower mortgage loan interest rate, that fee will be included in your closing costs
  3. Seller concessions: If the seller has agreed to pay all or some of your points or closing costs, the fee(s) will appear as a credit on your closing statement

We will provide you with a Loan Estimate of settlement costs within 3 business days of your mortgage loan application. The closing agent or title company will notify you of your final settlement costs within 24 hours of your closing. You should bring a certified or cashier's check for this amount to your closing.

When shopping for your next home, know how much you may be qualified to borrow for your new mortgage. Talk to your TD Bank mortgage advisor to get prequalified and learn about your loan options.

• To get prequalified, you will need to provide your basic debt, income and asset information; your mortgage advisor will pull a credit report
• By the end of your conversation with your advisor, you'll know how much you prequalify for and how much home you can afford

If you plan to use money from the sale of your current home to finance the down payment for your next home, your real estate professional and mortgage advisor can help with this process.

STEP 1: Before you list your home

Get your current home ready to show by getting rid of clutter and making small improvements, if necessary.

Work with a real estate professional to set a realistic asking price that will help you estimate your net proceeds from the sale.

Based on that estimate, your mortgage advisor can work with you to estimate a possible down payment, as well as how much of a mortgage loan you may qualify for.

STEP 2: Once your house is under contract with an offer

If the net proceeds from the sale of your home are less than you estimated, you will want to speak with your mortgage advisor to make any necessary adjustments in how much you can borrow for your new home.

Keep in mind that realtor fees, taxes and other expenses may decrease the amount you anticipate receiving from the sale of your home.

STEP 3: Coordinating your closings

The closing agent will coordinate both closings on the same day, including the transfer of funds from the sale of your current home to the purchase of your new home.

If your closings are not coordinated, your mortgage advisor can help structure your new loan so you can carry two mortgages, if you qualify.

As an experienced homeowner, you already understand the financial aspects of owning a home. However, owning a second home can add other factors that you should consider:

• Cost of upkeep of two homes – repairs, taxes, utilities, etc.
• The impact of carrying two mortgages on your disposable income

A second home can also be a smart real estate investment if it provides a good rate of return when you sell. As you make your decisions about where to purchase and how much you are comfortable investing, it's a good idea to make sure you balance the excitement of owning a second home with the practical considerations.

The products and process for a second home mortgage loan is very similar to that for your primary residence. You can learn more about your best loan options and get a realistic price range for your search when you talk to your TD Bank mortgage advisor to get prequalified.

• To get prequalified, you will need to provide your basic debt, income and asset information; your mortgage advisor will pull a credit report
• By the end of your conversation with your advisor, you'll know how much you prequalify for and how much home you can afford

Condos can be a popular choice for a second home. Since the value and marketability of condominium properties are dependent on items that don't apply to single-family homes, talk to your mortgage advisor to see if the condo meets our lending guidelines.

Note: If you plan to generate rental income from your second home, you will need to secure a mortgage loan specifically designed for buying an investment property.

If your second home is in a different state, keep in mind that your lender must be authorized to lend in that state. TD Bank operates in 15 states from Maine to Florida – find a TD Bank near your property.

Additional considerations:

• Documentation and closing procedures may vary from state-to-state, so work closely with your mortgage advisor, real estate professional and closing agent
• Be prepared to be present for both your property inspection and your closing
• If you can't attend your property inspection, make sure you get the report and ask the inspector any questions
• If you can't attend your closing, your loan officer can help you identify who can legally represent you