Talk to a Loan Officer or Mortgage Broker First!!!
With more and more people deciding to buy a home, proper planning can make the difference between buying... and renting for another year.
Many new buyers get caught up in the fun of looking at homes and they don't consult a Loan Officer or Mortgage Broker before they search. Maybe they feel if they have good credit they'll get approved with little time and effort.
In some cases this is true, however there are many different ways your credit can be affected these days and underwriters (the people who make the decision to loan you the money or not) will not approve buyers for all kinds of reasons.
There are many things buyers would know if they went to a Loan Officer or Mortgage Broker at the beginning of their search. Three of them are:
- Don't buy a car just before you buy a home - Unless you pay cash forthe car, you're going to increase your debt to income ratio, which can bring down the amount you qualify for or cause you not to be approved at all!
- If you're putting down 5% on a conventional loan, you must bring the 5% yourself. It can't be a gift. If you are getting some of thaat money as a gift, you should have it in your account for two months prior to writing a purchase agreement - this ensures the money is "seasoned". Your Loan Officer can talk to you more about that.
- Getting pre-approved will let you know what monthly payment corresponds to your purchase price, plus how much cash you need to bring to closing since there are other costs besides 3.5, 5, or 20% down. This also allows you to write an offer quickly, which is important since many homes are currently selling in less than a week.
If you check with a Loan Officer or Mortgage Broker first, you'll gain more knowledge, save time, and avoid making a mistake like falling in love with a house that you can't buy.
Thanks for reading!