The First Step of Any Financed Buyer
Before you start looking at Buying a Home, it’s recommended to find a target price range that you can afford. A Mortgage Lender will want to make sure you can handle the Down Payment, plus a monthly mortgage payment made up of Principal, Interest, taxes and insurance (PITI). This process is known as getting Pre-Approved.
Setup For Success
Having a budget is going to help us narrow your Home Buying Process to a price range that’s comfortable for you. In our market here in the Columbia River Gorge, this often times will also dictate the quality and location of your home. When you are Pre-Approved, ask me for a 12 month report for all of the homes within your desired critera and price range. If our results are limited, we know we may need to make some adjustments to our expectations. If we have a lot of homes or as I call them, “opportunities”, we know we’re in the right price range, or location.
Being pre-approved also makes for a stronger offer in the eyes of a seller, and in my real estate practice, it is required if you are financing. What a bummer it anyways to find a house that you like and realize it’s out of our price range. If that’s not enough, no one likes to be rushed to buy a home, so get pre-approved and take it off your plate.
Interest Rates Affect Your Buying Power
Interest rates and your personal finances will influence the amount of the house you can afford. As a result it’s always good to talk to a lender about the market and ways to overcome the timing of the market. Articles like, The Basics of Seller Credits, are a great examples of how a buyer can combat higher interest rates and get into the home they want in a slower, less competitive market.
Choosing a Lender
When it comes to real estate transactions, you may have heard it from me before: Build a Strong Team. By doing so, you will significantly improve your expirence in the home buying process. In light of this, I have done the vetting process for you in my years of real estate and included my list of preferred lenders on my Local Resources page.
Why use my preferred lenders?
- We have already established a strong line of communication, therefore speeding up process for you.
- You will receive higher quality customer care for having been a referral from me.
- They live locally and understand local lending regulations, the market, and appraisers.
- My preferred lenders are experienced and have seen more than one market cycle.
- I know their loan programs, eliminating any need for you to find a specific loan program and Loan Officer.
What You’ll Need
In order to plan properly to talk with a lender, you need to understand what lenders are looking for from a borrower. There are three factors that help determine if you quality for a pre-approval and for how much.
- Your Income
- Your Assets
- Your Credit History
Not surprisingly, most loan programs require you to verify all of your income sources. Your mortgage consultant will let you know what documentation is needed for getting pre-approved. Typically, you will need to provide pay stubs and your W-2, and if you are self-employed, you may need to provide copies of your tax returns.
Loan Programs Offer Different Options
There are a wide variety of loan programs available to buyers, even more so today. So, review your options with your lender so you are not caught off guard in a transaction with the wrong type.
Some basic loan programs include:
- Conventional Loan
- FHA Loan
- VA Loan
- Rehab Loan
- Construction Loan
Cost & Fees
Getting Pre-Approved is free. So, before you start looking to buy a home, or believe that you can’t afford it, give it a shot. It doesn’t hurt to know where you stand. If anything, it gives you a goal to move towards in the future.
Knowledge is power my friends. Take care.
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