When Looking for a Home, Where do you Start?
When thinking of purchasing a home what’s the first thing that comes to mind? Generally speaking the answer to this question is usually, if not always, “Money”. While the housing market is on the rise and value of homes are increasing, now is the perfect time to buy! However, many people see the question of money not as a bump in the road, but as a huge roadblock. Well, I’m here to tell you it doesn’t have to be that hard if you take it one step at a time. I’m talking about getting pre approved for a loan which is the first step of many in purchasing a home.
What is a pre approval? Why is it so important? Well, a pre-approval means that you have a written commitment from a Lender to lend you a certain amount of money to purchase real estate under their conditions, such as interest rates and amount of LTV (Loan To Value).
Why is this so crucial? For several reasons: This will allow you to shop within your price range (allowing you to afford monthly mortgage payments) which you now know because of the pre-approval. It will also give you an advantage when you put an offer in on the home. You’re not only saying this is the home that you want to purchase but you’re also proving that you can afford it, through a reputable lender. Because of this your bid may be chosen over another higher bid simply because you have the pre-approval when they don’t.
How does one go about obtaining a pre-approval? Like anything in Real Estate and finances there is a finite process to how many lenders handle giving a letter of pre-approval. First off, you’ll need to do a little shopping. Ask around to lenders near you to search which loan program better fits you and your financial situation. Lenders will ask for things like your income, employment, debts, any past loans etc. You might also be asked for your tax return and bank statements. This is the information any lender would need to determine just how much they can loan you for your monthly mortgage payment.
Just keep in mind that after you get your pre-approval letter they are on time constraints and the home you’re thinking of purchasing may also still need an appraisal.
If you’re having trouble getting a conventional loan from a conventional institution because of bad credit or a past bankruptcy or foreclosure, then hard money just may be the answer for you. Here at Sun Pacific Mortgage and Real Estate we have many investors who allow us to lend to people who don’t qualify for the typical loan. If you or someone you know is in a similar situation, don’t hesitate to give us a call today!
Lynn Tardibuono – Flipper Chick- Real Estate Agent and Co-Owner of Sun Pacific Mortgage and Real Estate. Serving Sonoma County since 1988. Her number is (707)523-2099 and you can also visit our redesigned website at http://www.sunpacmortgage.com Also be sure to like us on facebook! Click this link!