Avoid Open Houses
Many first-time homebuyers believe their first step is to pull up their real estate search app of choice and head out on a full weekend of looking at houses.
This seems innocent enough, but it can be a big problem if you are unaware of how much home you can reasonably afford. Many first-time homebuyers find their dream home before doing their homework on home financing and find that that the house they love is WAY out of their price range. There is nothing worse than finding out the home you love is the home you can’t afford.
Look at Your Finances
Before jumping into the home search take a deep look at your financial picture. Are you paying your bills on time? Do you have large credit card balances? Are you delinquent on any accounts?
An imperfect credit picture isn’t a death sentence to your home ownership dreams, but it often can have large impacts on the loan programs you are eligible for and the interest rate you might pay on your loan.
Know Your Home Loan Options
A home loan is not a one size fits all product, and the lowest interest rate is not always the best. There are many loan types that require different levels of down payment and have short-term and long-term benefits for homebuyers. A trusted mortgage professional can walk you through the options and make recommendations on what product might be best for your situation.
Think of a mortgage professional as your guide through the home loan financing world. Don’t be afraid to ask any and all questions you might have about the home-buying process. There are many terms and products that you might not know about. A mortgage professional is able to walk you through these details and help you understand how those items relate to your specific home purchase.
Choose a Home Loan Partner
After you’ve looked at your home loan options and asked questions of potential mortgage partners, it’s time to choose the company that will help you with your home loan and start the approval process.
In order to make you stand out among potential competition, your home loan partner will want you to go through the pre-qualification process. During this process you will fill out a loan application and submit a variety of financial documents for review. Your home loan partner will walk you through the review of your finances and if you qualify, provide you with a loan amount that the company has determined you can afford. This pre-qualification is a backing from the home loan company that you can use to let sellers know that you are a serious buyer and you already took the first step in obtaining home loan financing.
Start Your House Hunt
With your pre-qualification letter in hand and your home loan partner by your side for support it is time to call your Realtor and start the house hunt to find your dream home. Best of luck!