Knowing how much home you can afford will allow you to refine your home search, which will help you find your dream home that much sooner. Anyone getting serious about buying a home should consider what it is going to take to get approved for a home loan.
We’ve put together this list to help you get the best rate and best payments when you’re ready to get approved for a loan…
- Don’t change job, become self-employed or quit your job
- Don’t buy a car, truck or van (or you may be living in it)!
- Don’t use charge cards excessively or let your accounts fall behind
- Don’t omit debts or liabilities from your loan application
- Don’t buy or finance furniture
- Don’t originate any inquiries into your credit
- Don’t make large deposits without first checking with your loan officer
- Don’t change bank accounts
Here are some tips that will save you time, money and headaches.
Tip #1: Get Prequalified
A prequalification takes 15-30 minutes and involves a few quick questions. You typically do this before you look for a home. At this point, the lender takes your word that everything you state is correct and will verify it at a later date. A credit check is run, and then all the information provided is put through an automated underwriting system, which will provide a preliminary status. At the end of the process, you will have an idea of how much money you can borrow, and often you will be issued a prequalification letter that states that a credit check has been run and based on the information provided but not yet verified, you qualified for a specific dollar amount.
Real estate agents will often ask for prequalification letters in the same amount of an offer they intend to submit on a property.
Determine your real estate needs and lifestyle goals.
Tip #2: Always Think Resale
Due to the mobility of our economy, the average length of ownership is about 5 to 7 years.
Aesthetics can be changed such as flooring, light fixtures plumbing, paint colors and wallpaper can all be changed. Do not let the lime green wallpaper turn you off from your potential dream home.
Tip #3: Do NOT Wait
Too often, we have seen home buyers fall in love with a property, wait a few days to make a decision because they are nervous and the home that they fell in love with SOLD to another buyer! If you love the home, do not wait for someone else to live in YOUR home – be prepared to write an offer! Compare Sales to determine the best price to offer, or to know if the asking price is correct, look at the recent sales of similar homes, called “comparable sales”. Let us help you with a Buyer’s Market Analysis.
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