This is the first post in a series of posts that will take you through the process of buying a home.
1. Get Pre-Approved
Many buyers want to start seeing houses right away, before getting PreApproved. Most of them have great credit, good income to debt ratios, and no real reason to be denied for a loan. So, why is it important to visit with a lender first?
- There are many other factors involved with a home loan from employment & job type to your tax returns. It is best to visit with them first to make sure there are no hiccups in the process.
- They will also check to make sure the debts list under your name are actually yours (identity theft!).
- If you will be using gift funds for your down payment, your lender will help you figure out exactly how it has to be done so there is no delay in processing your loan.
- Many sellers require that there home is shown only to pre-approved buyers.
- Make sure we are searching for homes that match your investment criteria so you are not disappointed by settling for a home too far below your means or falling in love with a home that is above your actual approval.
Check out the quick tips below.
Trust us on this one. Local lenders will often have more flexibility which is especially important if something goes awry. We provide our clients with a list of quality lenders who are honest, realistic and communicate well through the process. We will connect you with the best in the business locally.
86% of borrowers purchase within 10% of their maximum approval. We don’t necessarily encourage that if it puts a strain on your budget. It is more comfortable throughout the process if you aren’t maxed on downpayment and will be more comfortable after you close if you aren’t maxed on on monthly payments. This is the same advice your grandmother (and Dave Ramsey) would give you.
Once you are prepared and ready to go, it is important to keep your financial & job situation somewhat frozen until you buy. This ensures that your rate won’t change or that you wouldn’t be disqualified when they check everything a day or two before closing. Definitely don’t buy a new car or do anything that may alter your debt to income ratio. Less obvious items may be prepaying your movers or preorder furniture or appliances to have delivered.