So, you want to buy a home. The media says it's a buyer's market and you're starting to see prices in your range. Where do you start?
If you're planning on financing your purchase, the first step is finding out how much buying power you have. This is also known as a pre-approval and it is supplied from a mortgage lender or bank. Many sellers will require this letter of pre-approval to be submitted with any offer. In a buyer's market, this can be the difference between your offer or someone else's being accepted.
Now more than ever, buyers need to take the extra steps to making their financing a reality, and at a cost they can live with. The recent changes in the financial market are forcing lenders to require more information and documentation during the initial prequalification. All buyers should know in advance what documents they will be asked to provide to get pre-approved. Some of the documents you may be asked for are:
Bank Statements
- You will need to supply at least 3 months statements for all bank, investment and asset accounts.
W-2's
Paycheck stubs
- Paycheck stubs for last 30 days
Self-employed
- Need complete federal tax returns for last 2 years and year to year Profit & Loss statement.
Address of residence for past 2 years
- Include landlord or mortgage information
Address and mortgage information on all real estate owned.
If applicable, divorce decree, settlement statement or bankruptcy documents.
Become familiar with the mortgage process and terms. There are things YOU should know. An excellent resource is an article called "It's GREEK to me, the mortgage process and things you need to know" by Terry May. In it, Terry provides clear and concise definitions of otherwise confusing mortgage terms.
Find a local bank, credit union or mortage broker to process your application.
If you are already working with a Realtor, he/she should be able to put you in touch with a reputable mortgage lender in your area as well as provide a crucial link for communications.
Determine your comfort zone for payments, length of loan, interest, etc. Your mortgage lender can help you with this process.
Being prepared with the above documents will help you and your lender in getting your pre-approval underway.
When and if you get your pre-approval, find a Realtor you are comfortable working with and begin looking for your new home.
Have patience, be prepared and best of luck!
For more information on what's happening in Central Oregon, please call or visit my website www.kellisellsquick.com.
Kelli Fronabarger, Central Oregon Real Estate Expert
Bend River Realty- Broker
(541) 419-6300, (541) 322-0224
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