As the events of the last few years in the real estate industry show, people forget about the tremendous financial responsibility of purchasing a home at their peril. Here are a few tips to get you started on the road to home ownership.
Get pre-approved. By getting pre-approved as a buyer, you can save yourself the grief of looking at houses you can’t afford. You can also put yourself in a better position to make a serious offer when you do find the right house. Unlike pre-qualification, which is based on a cursory review of your finances, pre-approval from a lender is based on your actual income, debt and credit history. By doing a thorough analysis of your actual spending power, you’ll be less likely to get in over your head.
Choose your lender carefully. A good lender will take the time to carefully examine your mortgage application and help you determine what the best product for you is based on your circumstances; not all loans are created equal! They will then educate you on what your loan options are and work with your real estate agent to get you the home you have placed an offer on. Do you qualify for Down Payment Assistance? Should you go FHA, USDA, VA, USDA, 203K or Conventional? How does your debt-to-income ratio impact your buying power? These are all questions that a responsible lender will take the time to discuss with you.
Do your homework before making an offer. Before you make an offer on a home, your real estate agent and your lender should be able to help you determine the best offer price based on recent comparable sales. Your agent should advise you on the best offer price and your lender will help you determine whether that offer price meets your loan goals; remember its not just the price of the house that you have to consider. The lender will need to know the taxes, insurance, HOA and CDD.
I have established relationships with lenders that I absolutely love and trust because they take excellent care of my customers. If you want to start your path towards obtaining financing for a home, contact me for my list of lenders.