What is the first step in buying a home? Real estate experts agree that long before you peruse listings or check out open houses, you should talk to a lender about getting a mortgage.
While figuring out financing might not sound like the most exciting
way to embark on your house hunt, it's essential. Unless you have enough cash lying around to buy
a house outright—and let's face it, few do—you'll need a loan. And lenders don't just hand out loans to everyone who walks in their door. Rather, they'll need to review your financial history to determine how much money they're willing to fork over.
This info, in turn, will help you decide which homes are realistically in your price range and worth checking out.
HOW TO QUALIFY FOR A HOME LOAN
If you're still in more of the window shopping phase with no immediate plans to buy, you might want to opt formortgage pre-qualification,
which gives you a ballpark sense of your purchasing power without promises of a loan. But if you are
actively house hunting, you probably want to seek loan pre-approval
, where the lender performs an in-depth exploration of your finances followed by a solid promise for a home loan of a certain size.
To get pre-approved for a loan, expect to be asked to reveal your income, the amount of money you have in savings, and your credit history, which will help lenders determine how much money they're willing to loan you. Consider this step akin to getting
a full medical checkup before you train for a marathon. In this sense, a lender can tell you whether you're truly ready to embark on this home-buying journey or whether you should take a step back and do some prep work first.
For instance? If you do not have any savings available for a down payment [on a home], then your first step is to save every dime you can.. Or, if you have blemishes on your credit history (e.g., late or missing credit card payments), you might need
to take steps to clean up your credit report before you would even qualify for a loan.
HOW A LOAN OFFICER CAN HELP
If your financial profile reveals flaws that throw a wrench in your ability to buy a home, your loan officer can direct you on how to make improvements. Or, if you're deemed to be ready and raring to start house hunting now, a loan officer can give
you a heads-up on what to expect on the finance front.
The loan officer will be able to let you know which loan programs you qualify to use, what your purchase price limit is, what your projected monthly payments will be, and how much cash you will need to have on hand for a down payment, closing costs,
One of the lender we use has a program called The Homebuyer Credit. The Homebuyer Credit
is designed to help our local community buy new homes, or refinance their
existing home. It offers competitive interest rates, standard underwriting guidelines, and up to $20,000
to be used to cover closing costs. There is no repayment of the
funds and no additional qualifying requirements.
The Homebuyer Credit
can be used anywhere in California. There are no income limits, no area restrictions, and it is not just for first-time buyers. It can be used to
purchase a primary residence, investment property, or second home. The Homebuyer Credit
can be used with FHA, VA, USDA, and Conventional financing.
To find out more about the program go to www.MyHomeBuyerCredit.com
or to get started, you can apply online
out how much home you can afford and more. To get your questions answered, call Kevin McRae, Branch Manager at (888) 655-5000.