So, you’re thinking about buying a home! Maybe it’s your first home, maybe it’s your third…in any case, there are 5 MUST DO’S before you jump in that will minimize your stress and make this process as smooth as possible.
1. Most important – get all of your documents in order! There are necessary documents that must be submitted before a lender will even consider approving your loan. A lot of people get frustrated and confused trying to find all these docs, or wonder “why do I need to give you all of this?”. We want to show the Lender that you will be able to easily pay back the mortgage loan they give you. Your trusted mortgage professional is able to help you track down these documents, making this less stressful.
2. You have your docs in order. Now, let’s figure out how much money you have for a down payment. You will need at least 5% of the value of the house you want to buy, but 20% or more is better. If you put down less than 20%, you will need to get mortgage insurance. If you can put down 20% or more, you will not need mortgage insurance and you will pay a lot less in interest over the life of your mortgage.
3. It’s time to get a pre-approval. Pre-approved is different from pre-qualified, in that there is no guarantee that you will get a mortgage with a pre-qualification. To be pre-approved, you must fill out an application and submit your documents to a lender. Based on your current situation, the lender will agree to loan you an amount they trust you can repay. They will even guarantee your interest rate for 90 days. Next step?
4. Now that you are pre-approved, you have to make sure nothing drastic changes in your life. This means: don’t change jobs, don’t lease a car, don’t apply for another credit card. Anything that impacts your financial situation could nullify your agreement with the lender and you will have to start all over again.
5. Finally…you’re ready to start shopping. Pair up with a great Realtor who will have your back while hunting for your perfect house.
My biggest recommendation is to start early. In fact, I recommend that you meet with your mortgage agent at least 3 months before you want to buy. This will give you the time needed to get all of your ducks in a row and have a clear picture of your financial situation before setting out to find your dream home.
I’m here to help make your home buying experience as easy as possible. Please don’t hesitate to book a free consultation with me and start making a plan!