For many people, buying a home is one of the biggest decisions and most important investments of their lives. That’s why we pride ourselves in educating homebuyers...like you! We understand that purchasing a home and going through the mortgage process can feel intimidating, but it doesn’t have to.
This Homeownership Guide will walk you through the process of homeownership—from putting together your budget to what to expect at the closing table.
1
PREPARE FOR THE HOMEBUYING PROCESS
BUDGETING
When preparing to buy a home, your very first step should be to create and evaluate your monthly budget. Doing so will lay the foundation for every other decision you’ll make during your homebuying journey. Your monthly budget will help you determine what you can realistically afford, set a savings goal for your down payment and moving expenses, and prevent any future financial stress.
To determine your budget, write down all of your current monthly expenses. Begin with necessities like rent or mortgage, utilities, groceries, and transportation. Then, add in entertainment and savings. Subtract all these expenses from your monthly income. Any remaining funds should go into savings or should be used to pay off debt.
Monthly Home Budget
WORKSHEET
Creating a budget for your future as a homeowner is a necessity. Buying a home is not something you should go into on a whim. Use this worksheet to create a budget for yourself!
Current Expenses
Rent/Mortgage
Renters/Home
Modified
Groceries
Child
Pharmacy/Doctor
Eating
Entertainment
Child
GATHER YOUR DOCUMENTS
Once you have your budget created, the next step is to gather the documents you’ll need to apply for a loan.
These documents help determine your eligibility for a loan. The below list is not comprehensive, although these are the most common documents required.
Driver’s license or other stateissued photo ID
Past two years of employer W-2 forms
Pay stubs covering the past 30 days
Two consecutive months of bank statements
Ruoff’s Loan Butler app and online portal allow you to upload your documents anywhere! We can even connect your bank information and pay stubs automatically.
GET PRE-APPROVED 2
At this stage, your Ruoff Mortgage loan officer will use the documents you provided to get you pre-approved. Doing so will confirm how much you can spend on a house, helping solidify your budget.
Getting pre-approved before you even start looking at real estate listings will ensure you don’t waste time looking at homes outside of your budget. If you have a pre-approval letter from a qualified lender like Ruoff Mortgage, your offer is more appealing to sellers, since it shows that you’re a serious buyer.
Once you’ve been pre-approved, remember to keep your financial situation steady. Your pre-approval is based on your monthly income and expenses.
So, if you make a large purchase or quit your job, your monthly finances will change and your pre-approval letter will become inaccurate.
DO’S & DON’TS DURING THE LOAN PROCESS
DO
• Continue to make all of your monthly payments on time and in full.
• Stay current on every single bill.
• Inform your loan officer if anything changes in your situation.
• Let your loan officer know if there’s any changes to your purchase agreement.
• Hang on to every deposit slip, pay stub, refund check, bank statement, etc.
• Give your social security number to anyone other than your loan officer.
• Apply for any new credit, as this could lower your credit score.
• Make large purchases on any of your existing credit cards.
• Quit or change jobs.
• Pay off any large debts, as doing so could affect your credit score.
• Open or close any bank, investment, or retirement accounts.
DO NOT
• Transfer balances from one account to another, or refinance any debt.
SET YOUR PRIORITIES 3
Setting priorities is key when searching for a home. It helps you focus on what truly matters and prevents you from looking at homes with features that may not align with your lifestyle or budget.
HOME NEEDS & WANTS
Make yourself a list of must-haves versus wants. Be critical, yet realistic. Ask yourself:
What are the features I can’t compromise on, because they affect my daily life, finances, or long-term goals?
What are the features that would be great to have—but are not deal-breakers if missing?
To help you determine what is most important to you in a house, fill out the Dream Home Priority Checklist on the next page. When you’re done, share the checklist with your real estate agent so they know what is most important to you in your future home.
Dream Home
FINDING YOUR IDEAL NEIGHBORHOOD
Choosing the right neighborhood for you is just as important as choosing the right home for you. Use our Ideal Neighborhood Worksheet on the next page to identify what matters most to you in a neighborhood.
Do Your Research
• Explore the area: both in-person and online.
• Check Yelp.com for reviews on local restaurants, services, and entertainment.
• Go to GreatSchools.org for local school ratings and reviews.
• Head to Homefacts.com and Realtor.com for demographics, crime stats, and home values.
Consider the Commute
• Use Google Maps to estimate time and transportation costs.
Drive the Area
• Visit potential neighborhoods at different times of day to observe traffic, noise, and overall vibe.
Look at the Numbers
• Compare property taxes and check historical trends.
• Research population density at Census.gov to understand space between homes.
• Ask your agent about HOA dues and what they cover.
Ideal Neighborhood
WORKSHEET
Whether you’re reviewing a home online, looking at a listing sheet while touring a potential home, or have already made an offer and are waiting on an inspection, be sure to get answers to these questions before you commit to buying a home:
Public Transportation Access Neighborhood Culture House Uniqueness
TEAM
UP WITH
A REAL ESTATE AGENT 4
Working with a local, experienced real estate agent will help make your homebuying process smoother, safer, and more successful. An agent works with your Ruoff Mortgage loan officer to act as another professional by your side to save you time and stress.
BENEFITS OF USING A REAL ESTATE AGENT TO BUY A HOME
Real Estate Agents Provide:
Expert Guidance
• Understanding local market trends
• Crafting strong offers
• Avoiding costly mistakes
Legal Protection
• Ensuring paperwork is accurate and complete
• Protecting your rights and interests
• Reducing the risk of legal issues later
Skilled Negotiation
• Getting the best possible price and terms
• Handling counteroffers and inspection issues
Access to Multiple Listing Service (MLS)
• More options than public sites
• Early access to new listings
• Accurate and up-to-date data
Streamlined Process
• Coordinating with inspector, appraiser, title company
• Scheduling showings and handling logistics
• Keeping the transaction moving forward to closing
Need a recommendation? Your Ruoff Mortgage Loan Officer would be happy to refer you to an experienced real estate agent who is ready to help you find your dream home.
SHOP FOR YOUR HOME 5
Touring a house with your real estate agent is an exciting step in the homebuying process, but it’s important to stay focused and think critically. Here are a few things to keep in mind:
Focus on the Big Picture
• Don’t get distracted by decor. Look past paint colors, furniture, and staging.
• Examine layout and flow. Does the home fit your lifestyle and needs?
• Check room sizes. Will your furniture fit comfortably?
Look for Red Flags
• Signs of water damage: stains, odors, or warped flooring.
• Foundation issues: cracks in walls, uneven floors, or sticky doors/windows.
• Roof and exterior condition: Missing shingles, sagging gutters, or old siding.
• Outdated systems: Ask about HVAC, electrical, and plumbing age and condition.
Ask Questions
• How old is the roof, furnace, and water heater?
• Are there any known issues or repairs needed?
• How long has the home been on the market?
• What are the average utility costs?
MAKE AN OFFER AND GET IT ACCEPTED 6
Once you find a home you love, it’s time to put in an offer!
Your real estate agent will write up a purchase agreement and review the terms with you. If you’ve been pre-approved through Ruoff Mortgage, you will separate yourself from the buyers who did not get pre-approved and have a great chance of getting your offer accepted. Once your offer is in writing, your agent will send it to the seller’s agent and will handle any negotiations.
NEGOTIATIONS
The negotiation stage of purchasing a home can be a sensitive time. Real estate agents are the experts at getting you the best price possible without insulting the seller and turning them away. Negotiations depend heavily on the state of the real estate market—which means they are constantly in flux.
SIGNING YOUR PURCHASE AGREEMENT
Once negotiations are complete, your real estate agent will send over the final offer to the seller— this includes the updated purchase agreement, with any conditions from negotiations added. This document outlines the things that you and the seller have agreed on, such as updates or changes the seller must make, and the sale price. Both you and the seller will sign the agreement, upon which will make it a legally binding contract.
Once your offer is accepted, your Ruoff Mortgage loan officer will use your final purchase agreement to get started on your home loan.
You are now in the homestretch of your homebuying journey!
After your purchase agreement is signed and finalized, the next step in the process is the Home Inspection and Home Appraisal.
INSPECTION
Ordered by your real estate agent, the home inspection is completed by a trained professional who looks at the home you are buying to determine its condition. In general, inspections are optional; however, some counties require specific items to be inspected in order to ensure they meet code.
Most future homeowners opt for a whole-house inspection. For this, home inspectors do a full head-to-toe review of the condition of the home—from the furnace, water heater, electrical panels, roof, attic, and even crawl spaces. The inspector then provides you with a written report summarizing their findings and making recommendations on anything they feel needs to be addressed.
Sometimes a home inspector may recommend further review by a specialized inspector, like a furnace technician or a roofer. You can also choose to have extra inspections done, like a termite inspection or a radon test.
APPRAISAL
Ordered by your Ruoff Mortgage loan officer, a home appraiser prepares a written report showing what they feel is the fair market value of your new home, based on comparable sales data. Real estate appraisals are usually required.
KNOW YOUR FINANCING OPTIONS
Once your offer is accepted, your purchase agreement is finalized, and your inspection and appraisal are complete, your Ruoff Mortgage loan officer will get to work on your loan.
Your loan officer will work with you to find you the best loan option for you and your unique situation. There are dozens of loan products available, and an experienced loan officer will be happy to educate you on your options. They will help you every step of the way.
THE RUOFF CLIENT ADVANTAGE
Ruoff Mortgage uses industry-leading technology to make the loan process quick, convenient, and secure. Loan Butler is our online portal and mobile app which allows for strong and effective communication—the key to a successful transaction.
Milestones
Receive real-time Milestone Updates by email, on the portal, or on the app. Track your loan’s progress anytime, anywhere.
Security
Share sensitive data safely. Our custom platform is encrypted, certified, and secure, which means your important information is safe with us.
In-House Processing, Underwriting & Closing
Our in-house processing, underwriting, and closing departments speed up the loan process while providing individual, customized service.
We know that moving into your dream home as soon as possible is a priority, and with this technology, we can get you from application to closing table in just 15 business days.
FINALIZE YOUR PAPERWORK 7
Before you head to the closing table, your loan officer will collect some paperwork from you.
Purchase Agreement: Your loan officer will obtain the fully-executed purchase agreement from your real estate agent. Your loan officer will use this document to update your application information and lock in your interest rate.
Remaining Paperwork: You have likely already given your loan officer some of your financial paperwork, but they may need to be resubmitted if they become outdated.
Initial Disclosure Signing: There will be some initial paperwork that you’ll need to sign before your file is sent to our underwriting department for review and approval. Mortgage underwriting is a process the lender uses to assess risk and ensure that borrowers meet all the requirements for a home loan.
Homeowners Insurance: Your loan officer will request that you provide proof of homeowners insurance. They will set up an escrow account to include your homeowners insurance, property tax, and any PMI into your monthly mortgage payment.
Digital Closing Experience: With Ruoff Mortgage’s Digital Closing Experience, your electronic signature will be applied to nearly all the documents in your mortgage’s closing packet, which will then be safely uploaded back to Ruoff. When you arrive at the closing table, you’ll only physically sign a few documents.
CLOSE ON YOUR HOME! 8
On closing day, you’ll meet with your real estate agent and lender at the title company to wrap up the loan process. The home seller will usually be there with their agent as well. The title company will review and explain your legal documents. The title company will review and explain your legal documents, and you will sign where necessary. Your loan officer will send your closing figures to you ahead of time, so you’ll have plenty of time to review before you arrive and sign.
Once you’ve signed the paperwork, you are officially a homeowner!
UNDERSTAND YOUR MORTGAGE 9
If you’ve ever wondered where your mortgage payments go—you’re not alone. When you make your monthly mortgage payment, your money goes toward your home’s principal, interest, taxes, and insurance (also called PITI).
WHAT MAKES UP YOUR MONTHLY MORTGAGE?
PRINCIPAL
The principal is the dollar amount you’re financing after your down payment.
INSURANCE
Homeowners insurance provides financial protection for your home and its belongings.
AMORTIZATION
Loan amortization is the process of paying off your mortgage through monthly payments, which include both the principal and interest in each payment.
As you pay your home’s mortgage each month, the amount you’re paying into the principal and interest changes over time. When you first begin making payments, a larger portion of
INTEREST
Interest is what you pay to the lender in exchange for the risk they assume.
TAXES
Homeowners pay taxes to their local governments in exchange for services received, such as schools, libraries, and more. your monthly payments go toward paying the interest. But, over time, more and more of the payment will go toward paying off the principal.
This means that you are also continuing to build more equity in your home month after month.
MOVE IN 10
You bought a house! It’s time to start moving in!
Moving is a huge task—especially if you’ve lived in your current place a long time and have accumulated a lot of stuff. Aside from moving your belongings to your new home, keep these other important tasks in mind during this busy, yet exciting time.
SAFETY
• Change your locks. It’s a quick and easy DIY project.
• Check your fire and carbon monoxide alarms’ batteries and make sure they work.
• Buy a fire extinguisher (or several, depending on the size of your home). You should keep one in the kitchen, garage, and in any rooms with fireplaces.
• If you have children, childproof your house with furniture anchors, safety locks, and baby gates to keep unsafe items out of childrens’ reach.
NEW ADDRESS
• Make calls to your bank and credit card companies to ensure they have your new address.
• Complete a USPS change of address form online or at your local post office.
• Call your utility companies to get your utilities switched to your name at your new address.
• Schedule time with the internet/cable company to get everything set up at your new home.
NEW NEIGHBORS
• Make a point of introducing yourself to your neighbors during the first week or two of you moving in to establish a friendly relationship.
Buying a new home can be overwhelming; but remember—you are not alone. When you go through the homebuying journey with a great team by your side, you will be much better off. Your Ruoff Mortgage loan officer and real estate agent will help guide you through. When you’re ready to take the next step, we are here to walk with you— every step of the way.
