OK, so you are ready to buy your first home, now what to do? First of all, you need a pre-approval to put an offer on a home, and it must be current. Also, most Realtors will not work with a buyer client who does not a have a current pre-approval in hand. Realtors only work with qualified buyers for it shows you are qualified and motivated to go to the next step of actually purchasing a home.
So, what exactly is a pre-approval letter? It's a document that shows the seller you have been evaluated regarding your credit history, the capacity of what you can borrow in regards to you and/or partner, determined through your financial references, as well as employment history and verification. This process can be done over the phone with the loan officer asking critical questions, and also seeking paystubs and supporting documentation that gets entered into the banks underwriting system to find out what you can afford.
The importance of this evaluation of your finances has much capacity. Imagine you find the perfect home, and you have not been evaluated, your offer gets accepted, you pay for engineering, down payment, and attorney fees, appraisals etc and then you discover you cannot afford the home. Besides completely pissing off the seller this scene of events creates this crazy domino effect for you and the seller, and guess who else? Their own sellers of the house they are buying and their buyer and so on, the havoc simply reverberates.
The other value of a pre-approval is it will help determine for you what you can afford; you don't want to be looking at homes out of your price range, the disillusion of not being able to afford your dream house is quite disappointing. Look at what you can afford and be realistic. Ask your Realtor to send you homes that are in the ball park of what you can afford. By getting a pre approval with a loan officer, and also discussing your needs and wants with your Realtor, you can educate yourself and really determine what you can afford on sure footing. There are many of clients I have worked with clients who after discussing with a me and determining their finances who have decided to wait 6 or more months to get together a more substantial down payment, and or by streamlining expenses how much more they could afford if they cut out the mindless indulgences.
Save yourself time, money, and angst; Do your homework, go online and search for homes, get pre-approved, and find a great Realtor to guide you into finding the right home for you.
Comments (5)Subscribe to CommentsComment