First Time Homebuyer Tips : Getting Qualified & Knowing your Credit -- Part 2 of 5
Before I start.... A very important FYI - Stop listening to the news & media !!! There is still plenty of mortgage money available. You don't need perfect credit and 20% down. You can have less than perfect credit and 3% out of pocket. FHA loans can help you with this.
What is important when shopping for a home and shopping for a mortgage? Preparation is usually the key for most things in life. Being successfulat it doesn't always happen overnight. And buying a home is usually the biggest investment is one person's lifetime.
So, understanding the process is key, but that will be explained in another part. Just getting qualified seems to always be the biggest hurdle, depending on if you are dealing with a mortgage professional or not. And being educated about the process from the start is so lacking in today's market. Being educated from your loan officer is important.
Shopping for a home : how and where to begin...... ????
- Ask family or friends for someone trusted.
- If you are currently working with a realtor, they should know one or two trusted loan officer's in the mortgage industry. Tip : Realtors might hate me for this.... but just because they say their person is the best, doesn't always mean it's true. If you feel like you aren't getting the service, or prompted returned calls, or it just doesn't feel right... don't feel obligated. I have my reasons for this and true examples of past clients that chose me later in the process because of this.
- Online, the internet. Now, this can be dangerous at times. But how about reading blogs of a few professionals, to get an idea about what they offer and their services. Instead of those that advertise low rates or advertise no costs, which anyone can do.
- If you bought a home once before and were very happy with your previous loan officer, go back to what made you happy. Who you trusted and who you had success with. (sure, this is for 1st time buyers, but maybe you bought many years ago. Maybe your significant other once owned a home.)
There are other avenues in regards to where you can find lenders and realtors. And understanding the process behind the scene, what to expect from a lender, and how to proceed can and are very crucial when it comes to buying a home.
Get qualified before shopping for a home. There are so many misconceptions of what a pre-qualification letter and a pre-approval letter is in regards to when speaking with a loan officer. There is a huge difference and many don't know. For specifics, please read : The difference between a Pre-Approval and a Pre-Qualification letter.
Understand Your Credit : Many lenders buy lists from the credit agencies so they can solicit new business, especially from those that just had their credit viewed in the last month. Meaning, if you just spoke to a loan officer that you gave permission to pull your credit, you might be getting calls from other lenders, whom you didn't even inquire about. What can be done?
- Don't keep shopping. Many inquiries over a certain time could hurt your credit rating. If you feel comfortable with one person, why risk shopping with others that will over promise and under deliver. You could shop yourself out of the market. The bottom line is that we all get the money from the same place. Usually when someone has a better rate or no costs outside the average, if you have been shopping, then it's usually too good to be true.
- Trigger lists
-- Each lender should include in their loan application package a form that allows you to "opt out", not allowing that lender to sell your personal information. You can also go to this web site for more information : https://www.optoutprescreen.com/?rf=t
- Know how your credit score is calculated and how you could improve your credit score. This is something that I can help you with, because of my 16 years of experience in the mortgage industry. Don't let other lenders make it seem that it's all about your credit score also. There is more to it than just your credit score.
- The biggest issue : Loan officers that don't actually understand credit or what to look for. If your mortgage loan doesn't close, 80% of the time it is because the loan officer did read your credit report correctly. Understanding FHA credit & credit in general
Overall, don't get overwhelmed with all of the information provided. Again, that is why there are professionals out there to help you. Just be careful because there are so many that are just sales people. If you can sense that someone is not only helpful, one who educates you about the process, but very passionate in what they do, this might be your best avenue or resource in receiving the best advice and service when obtaining a mortgage.
TIP : Don't be afraid to ask your loan officer or realtor questions. In my opinion, a bad question is a question not asked.
When it comes to the loan officer, allow for some time for this individual to ask the appropriate questions. It shouldn't matter if it is done in person or even on the phone. The main concern is allowing about 20-30 minutes so they can do their job correctly. And this is just for the basics. My biggest concern in helping you is knowing your GOALS. And be honest and upfront with the information that you supply, no matter what the situation might be.
Photos : All pictures curtesy of istockphoto
Key Tip : The Home buying process.... ENJOY it and treasure it for life. Your memories will last forever. Find a keep sake or two for a scrap book.
The First Time Homebuyer Series :
Understanding if you should rent or buy :
- First Time Homebuyer Tips : Understanding the total mortgage process -- Part 3 of 5
- First Time Homebuyer Tips : FHA, a better mortgage program? -- Best Programs & Why -- Part 4 of 5
- First Time Homebuyer Tips : Summary - Red Flags to be aware of -- Part 5 of 5
Buying Tips :
- FHA 203-k Loans
- Asbestos and Your Health, Tips for Remodeling your Ann Arbor Home -- This post does talk about some specific places in Michigan, but in general, Missy Caulk gives us some great information on homes built prior to 1980 in regards to asbestos. This is a must read.
- FHA Loans - USDA Loans - Conventional Loans - VA Loans -
Experience & Knowledge at its BEST !!!
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For more information on FHA loans, please go to this link. The FHA Expert
For more information on how you can obtain your dream home, please click here : Mortgage Financing Options
For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!!
Copyright © 2008 by Jeff Belonger
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