In the last blog post, I outlined the steps for buying a home in La Crosse Wisconsin area (buying a home in La Crosse, Kansas might be a different proposition entirely!). Today, I'll expand on step number 1 - Go to a mortgage lender (or 3) to find out how much you are comfortable spending monthly for your new home and to check out their fees.
You may ask "Joan, why should I do that? I know how much I spend now. I can just look at a mortgage calculator online and get that information!" Well, yes and no. There are components of your monthly loan payment of which you might not be aware. Most lenders now require that real estate taxes and homeowners insurance be escrowed and paid monthly. There is also private mortgage insurance for down payments less than 5%.
Each lender have their own programs and lending charges. To be a wise spender, you should visit 2 or 3 lenders and get an estimate of their charges. I can hear you now say, "But that will hurt my credit if I have it checked more than once!" If you do the checks with 30 days, it will not make a difference.
If you already have a Realtor (I don't know how to make the trademark sign that I am supposed to use by Realtor rules and regulations and secured by the sacred handshake), they might recommend a lender for you . This may be a good suggestion, but let me caution you. We chose our lenders because of their ability to close reliably and with the least fuss. They're probably not the cheapest in fees, but will probably involve the least amount of headache medication or alcohol. Hey, I never promise the road will be bump free. Realtors just try to provide the best shock absorbers. But more about that in a later post.
Please don't scoff at my advice. You will need to see a lender early and get a pre-approval. Say you do find a home you love and want to buy. You will lose out on it if you don't have an approval and the other buyer does have one. The listing agent will want to see it before recommending an offer to the seller.
Please don't hesitate to contact me for any questions, concerns or a good cookie recipe.
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