Preliminary Steps ^top

Purchasing a home and finding a mortgage can be an easy process if you know what to do and when. We recommend the following steps be taken to insure a smooth purchase transaction:

Look at your current financial picture! Is it manageable? What monthly debts do you have? How much cash is available for the purchase of a home (down payment, closing costs, escrows)?

Get Pre-Qualified! Find out how much of a home and what size mortgage you can afford before you shop. Use our mortgage calculators.

Get Pre-Approved! Fill out our on-line mortgage application or call an ESL Mortgage Origination Counselor at 585.336.1111 or 800.352.6669 to get pre-approved for credit and income before you shop for a home.

Determine where you want to live! Suburbs or city? Eastside or Westside? In a specific school district or near to your work? Decide in what area or location you will be happiest.

Determine your housing requirement! Colonial, ranch, split-level, old, new, in between? How many bedrooms and bathrooms do you want? Big yard or little yard? Single family home, town home or condo? Neighborhood or country location? These are questions you should answer in advance to help narrow your home search. View current home listings.

Once you've done these things, it's time to find a Realtor.

Finding a Realtor ^top

There are many people who call themselves "Realtors." But like any profession, there are good and bad realtors. There are also varying levels of expertise and certifications required for the designation of Realtor:

Broker - Licensed to carry out real estate transactions & receive a fee. This is the HIGHEST level and requires the most training and certifications.
Agent - Licensed to sell real estate but must work under the supervision of a Broker. Requires less training and certifications.

The designation of Real Estate Agent also has varying degrees of responsibility to an Agent's clients:

Seller's Agent - Loyalty and confidentiality to the SELLER only. Acts on the Seller's behalf to promote and expedite the sale of the Seller's property. Looks out for the Seller's best interests in the Real Estate transaction.
Buyer's Agent - Loyalty and confidentiality to the BUYER only. Acts on the Buyer's behalf to help the Buyer find a home to purchase. Takes the Buyer's preferences for location, type of home, size of home, price range, etc. into consideration when locating a home for the buyer to purchase. Looks out for the Buyer's best interest when preparing the Purchase offer, can help the Buyer find a mortgage lender and an attorney to represent them at the closing.
Dual Agent - Can represent both the BUYER and the SELLER. Can act to bring both sides together for a real estate transaction. Must have informed written consent from both parties and is prohibited from revealing confidential information about one to the other. Cannot "take sides" in the transaction. This can be an awkward arrangement for all parties concerned.

Recommendations for Selecting an Agent:

Ask family and friends for a referral. If they were happy with the performance of the Agent, you probably will be too!
Make sure the Agent is licensed to sell property in the state you are purchasing the property. Anyone can sell real estate but those with a State License have met the training requirements to help you better.
Look for an agency or Agent with listings of homes where you want to purchase. They know that local market best!
Check out the Agent's credentials & experience with the local realtor group. The Greater Rochester Association of Realtors, Inc. is a local organization that most realtors in this area belong to. It's function is to "police" their own members and act as an intermediary between a Buyer or Seller and the Agent in any disputes. The Association keeps records on the training and certifications received by each Agent.
Interview prospective Agents as to what they can do for you. You should come out of the interview with a good feeling about their expertise and how well you will be able to work with them. If you don't have a "good feeling" about them, find another realtor!
NOTE: An Agent is recommended but not required to purchase property in New York State.

Now, go house hunting to find the home of your dreams!

House Hunting ^top

Your Realtor will take you to many homes to view. It will be up to you to decide if the homes are right for you. Here's some things to consider when looking for a home:

Is the home structurally sound? - It may be a great looking home but if there are cracks in the foundation, or leak spots on the ceiling you may be in for more than you bargained for with future repairs. The best way to determine the soundness of a home is to have a "Home Inspection" completed by a certified inspector.

Home Inspections:

Not required by ESL
Different from an Appraisal as a Home Inspection does not determine value.
Reports on condition of all areas of the house and highlights those areas that need repair including Dangerous conditions, Code violations, Other miscellaneous repairs.
Recommends a course of action to correct the problems including how long it will take to repair and an approximate cost to repair the problem.
Cost of a standard Home Inspection is about $250 on up.
The Home Inspector should be certified by ASHI -American Society of Home Inspectors. Your Realtor or ESL can recommend a Home Inspector.

Does the house have the requirements you originally wanted? Number of bedrooms and bathrooms, floor space, kitchen requirements, etc. Refer to your check sheet of your original requirements.

Is the yard suitable to fit your needs? Kids? Pets? If you're a gardener, is there space enough to do this. If you have children is there enough safe, open space for playing. Set-back from the neighbors, sharing of land space with neighbors should all be taken into consideration. Look around at what is on all sides of the property ...open spaces? ...other homes? ...small businesses? ...a busy street? ...a land fill?! YOU have to live there and YOU want to be happy!

Is the property on Public Utilities? Water or Well, Septic or Sewers, Gas, Electric, etc. most rural properties will not have all public utilities. Urban and suburban properties should.

Will you be happy in the home? If you are purchasing with your spouse or another person, come to an agreement on the home you BOTH like.

Now you've found a home and want to put in a Purchase Offer.

Purchase Offer Suggestions ^top

Your Realtor can help you prepare a purchase offer on standard real estate purchase forms.

Read over the document carefully and discuss any concerns or questions with your realtor.

Most Purchase Offers:

Are time sensitive - The Seller must respond to the offer in just a few days.
Allow for counteroffers -The Seller did not like your offer and counters with another offer. If you don't like the Seller's counteroffer, you can counter the counter offer.
State the requirements of the purchase:property address, price, real estate commission to be paid and by whom, specific items to be included in the purchase price and/or items not included in the purchase price, signed by all buyers and all sellers, states expected closing date. Other requirements set by you could be the purchase price you are paying should be equal to or less than the appraised value of the property. (Don't pay more than you have to!!) And, the purchase offer should be subject to review by your Attorney (New York State is an "Attorney" state which requires an Attorney's services on a purchase transaction).
Set the amount of the Earnest Deposit - The Earnest Deposit is a deposit made by the Buyer to the Seller in good faith that the purchase will take place. The Seller's realtor usually holds the funds until the day of closing. The amount of the deposit can be just a few hundred dollars to 1% of the purchase price or more. Your Realtor can recommend a suitable amount. Earnest Deposits can sometimes be refunded if the purchase transaction falls through. Your Attorney can best help you in those situations.

Your Purchase Offer has been accepted... Now you need an Attorney!

Role of Your Attorney ^top

Why do you need an Attorney?

Purchasing a home can be a very complicated transaction from a legal perspective. You need someone to look out for your legal interests. Your Attorney should:

Review the Purchase Contract to make sure there is nothing amiss.
Makes recommendations for standard contingencies - Mortgage Approval, Sale and Transfer of Title, Home Inspection to name just a few.
The Sellers will have an Attorney... YOU need your legal interests represented, too!
Works with the Seller's Attorney to make the closing happen!

How to find an Attorney!

Get referrals from family, friends and co-workers... even from your Realtor.
Best Choice: Find an Attorney who specializes in Real Estate law and closing transactions.

The Closing Date!

In general, a Closing date is a date in the future (usually 30 days or more) that both the Buyer and Seller, their Attorneys and Realtors and the Lender (ESL) are working toward to complete the purchase transaction.

It is usually stated on the Purchase Offer.
It needs to be a realistic date (can the Seller move out by that time?)
Is subject to change if something unexpected happens with the transaction (for example: the Buyer cannot give clear title because of an old lien on the property).
Is not carved in stone and can be changed to suit the needs of the Buyer and/or Seller.

Your Attorney has reviewed and approved the Purchase Offer.

You need a Mortgage from ESL!

Working with Your ESL Mortgage Origination Counselor ^top

The Role of the ESL Mortgage Origination Counselor is to help you wade through all the various mortgage options and products available and to recommend what's best for your particular financial circumstance. ESL Mortgage Origination Counselors have extensive experience at quickly determining the right program to meet your needs. Meet our Mortgage Origination Counselors.

Determining what's right for you! The major factors for determining your mortgage needs are:

Income.
Credit.
Cash available to close.
Appraisal.

Income. Income from all applicants can be used to qualify for the mortgage. Income can be from many different sources but must continue for 3 more years in order to be used. Full time jobs, part-time jobs, social security or retirement income, distributions from investment accounts, IRA's are all eligible sources of income. Income from alimony, child support and separate maintenance need not be revealed if you do not want that income considered as a basis for repayment of the mortgage. Even income from regular seasonal work can be considered. Your income (Gross Monthly Income) will determine how much of a mortgage amount you can afford. A guideline that most lenders use is no more than 28% of your gross monthly income should be used for Principal, Interest, Taxes and Insurance (PITI). This is only a guideline.

Credit. A credit report will be pulled and reviewed with you. If the report shows any derogatory history (for example, being late on a payment) you will be asked for an explanation. In some cases, a written explanation will be requested. The number of open credit lines and installment loans will be reviewed to determine your debt load. The required monthly payment on each of these loans will be complied along with your proposed monthly mortgage payment (Principal, Interest, Taxes and Insurance) to determine your "debt ratio." If the debt ratio is considered too high (too much of your monthly income is being used to pay debts), the Mortgage Origination Counselor will recommend a course action to get the debt load (and ratio) lower. If you are a previous home owner, the repayment history of your previous mortgage will be of great importance. Most lenders want to see an excellent mortgage repayment history.

Maintaining a good credit report is very, very important!

Cash Available to Close. Whether you've saved money for the down payment or you are taking advantage of ESL's No Down Mortgage Loan program or our No Closing Cost Program, you will still need funds for the closing. Besides the down payment and closing costs, other closing funds include property tax escrows, prepaid interest (mortgage interest calculated from the day of closing to the end of the month), mortgage insurance (if applicable), a property insurance binder (homeowners insurance), flood insurance binder (if applicable) your attorney fees, plus, any other funds agreed upon between you and the seller. When added up, this can be a lot of money! Your ESL Mortgage Origination Counselor will give you an estimate of these costs and will look at the amount of money you have available to date. If you appear to be short funds, they will recommend a course of action which can include:

A gift from a parent or immediate family member.
Saving the amount until closing.
Borrowing funds from your 401k.

See a closing cost estimate.

Appraisal. When you apply, ESL will order an "appraisal" to determine the market value of the property you are purchasing. The appraised value will support the fact that you a paying a fair price for the property. An Appraiser (Certified in the state you are purchasing the property) will receive a copy of the purchase offer and visit the property. They will check the size, condition and special features of the home and compare them to at least 3 other properties that have been sold recently nearby. The Appraiser then determines the Market Value.

Your Loan-To-Value (LTV - loan amount versus the purchase price or appraised value, which ever is lower), is calculated. If your LTV is over 80% then Mortgage Insurance (MI or PMI) will be required.

Mortgage Insurance or Private Mortgage Insurance is provided by a non-government insurer that protects lenders against loss if the borrower defaults. It must be paid by the borrower until the LTV is at or below 78% of the original appraised value.

Selecting the Mortgage Product that right for you!

Product and Program Selection ^top

Your Mortgage Origination Counselor will tell you about ESL's mortgage products and programs being offered. What they are, how they work, what current programs are being offer by ESL and what the current rates are for each product.

ESL offers:

Each product category has pros and cons and it will be up to you to select the product that you are comfortable with. The Mortgage Origination Counselor can help you with your choice based on your future plans with your new home... is it a starter home or a home you will be living in for a long time.

You've completed the Application Process!

ESL Mortgage Process ^top

When you choose ESL as your mortgage lender you are choosing a team of highly experienced mortgage loan professionals. The ESL Mortgage Team includes a Mortgage Origination Counselor, Processor, Underwriter, and Closer. Speaking with an ESL Mortgage Origination Counselor is the beginning of the ESL Mortgage Process. Follow the Preliminary Steps to get started.

An ESL Mortgage Origination Counselor will:

Assess your needs and recommend mortgage programs that are best for you.
Qualify you for a mortgage amount, quote interest rates, and determine your cash requirements at closing.
Review your credit history and take your application.
Inform you of any credit or cash issues and advise you of your options.
Contact an ESL Mortgage Originator.

An ESL Mortgage Processor will:

Review your application, verify information, and gather other information necessary to complete your file.
Order an appraisal.
Send you documents to sign and return.
Forward the completed file to an ESL Underwriter.

The ESL Mortgage Underwriter will:

Evaluate your ability to repay the loan within the terms and conditions of the mortgage.
Analyze four factors: Income, Credit, Cash to Close, and Appraisal.
Approve or decline your loan request.
Issue the Final Commitment Letter upon loan request approval.

Final Commitment Letter:

Lists the terms and conditions of the approval.
Defines all requirements to close the loan.
Gives instructions to you and your Attorney for the closing.
This is an important document. Read it carefully when it arrives.
Give a copy to your Attorney immediately.
Call ESL with any questions.

If your loan application is declined:

At the time of application, Mortgage Origination Counselors will inform borrowers if they have credit issues or not have enough cash to close.

While examining verified facts, the Underwriter may find discrepancies that could cause an applicant to be declined. When that happens, the Underwriter will:

Review the situation with you and ask for clarification.
Send a legally required letter describing why you were declined.
Suggest, when possible, a course of action for your loan to be approved.

If you are approved, your file then goes to the ESL Closing Group to arrange for your closing.

Who's Involved in the Closing For a New Purchase? ^top

What is a "Closing?" A Closing is when the final documents are signed to transfer title from the seller to the buyer.

The "Players"

Seller's Attorney
Your Attorney
ESL Mortgage Closer
YOU

Seller's Attorney

Re-dates the abstract, map and prepares the proposed deed.
Resolves any title issues surfaced during the abstract re-date.
Determines the Seller's mortgages to be paid.
Sends papers to your Attorney.

Your Attorney

Reviews all papers received from the Seller's Attorney for accuracy.
Resolves title issues with the Seller's Attorney and obtains a Title Insurance Binder.
Arranges with ESL, the Seller's Attorney and you. for the date and time of the closing.
Reviews your Final Commitment Letter for special requirements & works with you to get them met.
Just prior to closing, calculates the final cash you will need to close and gives you instructions for closing.

ESL Mortgage Closer

Reviews all documents provided by your Attorney.
Provides final closing documents including the Mortgage & Note, HUD-1 closing statement, other ESL documents.
Prepares final ESL closing costs/cash needed.
Schedules your closing day when the conditions of your commitment letter have been satisfied and you are cleared to close.

YOU

Meet any special conditions or requirements listed in the Final Commitment Letter.
Discuss the closing with your Attorney.
Alert your insurance agent that you need home owner's insurance effective the date of the closing.
Get the final closing costs the day before your closing from your Attorney.
Bring the money to closing in a bank check (not a personal check) and your checkbook for small items.

Congratulations. It's Closing Day and you can finally take possession of your new home.

So what goes on at a Mortgage Closing?

You, your Attorney, the Seller's Attorney and an ESL paralegal meet at ESL.
Legal documents are signed including the ESL Mortgage & Note.
Checks are given to the Seller's Attorney... Your bank check, an ESL Mortgage check, possibly a personal check from you for small items.
Copies of all signed documents are provided for future reference.
You get the keys to your new home and can move in.

Good Luck in your home from your ESL Mortgage Team.