Dealing with Financing
When you want to go from renter to home owner, don’t let the home loan lending process intimidate you. A lender will help you make your plan a reality. But you have to make the first phone call. Here are a few tips for dealing with the dollar signs so that you can take down that “for sale” sign on your new home.
Get pre-approved. By getting pre-approved as a buyer, you can save yourself the time and disappointment of looking at houses you can’t afford. You can also put yourself in a better position to make a serious offer when you do find the right house. Pre-approval from a lender is based on your actual income, debt and credit history. By doing a thorough analysis of your actual spending power, you’ll be less likely to get in over your head.
Choose your lender and your mortgage carefully. There are LOTS of lenders with LOTS of different kinds of loans. Talk to more than one. Start with a local bank in your community, since its loan officers know more about local real estate than an internet “bank” does. Call your credit union if you belong to one; it may offer a competitive interest rate. Lenders will compete for your business if you have a strong credit rating. If your credit rating is more moderate, they will work with you to find the right loan for your situation, especially if you are a first time buyer or a veteran. There are lots of online resources which explain the differences between various loans. Check out Realtor.com, for example.
Give your loan officer what they ask for. Throughout the loan process, your lender will ask for documentation like tax returns, paycheck stubs, bank, credit card and student loan statements. Always provide them promptly to keep your loan on track. Your agent will send your lender a copy of the purchase agreement, any inspections and all changes to the contract. Your lender will also ask you for evidence of insurance on the house to take effect on the day you buy it. If you grow weary from multiple requests for information, remember: they are protecting the lender’s investment in your home!