As we go through life, there are a number of firsts for all of us. The first time we take a step. Our first word. First time we drive a car. But one of the scariest firsts is the first time we purchase a home.All the processes and steps we have to learn and remember. Finding a real estate agent and lender. Calculating and re-calculating your income and debts, and even after all those calculations, still not sure if you want to go through with it. How will you make the payments? What if one of us loses our job? What will the housing market do? It is a hard decision to make when thinking about purchasing your first home.
Does purchasing a home have to be that daunting? No it doesn't. Sure there are a lot of new things to learn, but once the excitement and nervousnessgo away, you will sit back and realize the whole process was not that difficult. The most important, and I must stress MOST important thing to do is ask questions. Do not assume anything. When it comes to purchasing a home, there are no dumb questions. You are investing a large chunk of your savings and income into this home, and if you are using a real estate agent or lender that doesn't want to take the time, or skirts around the answer to your question, you have the wrong people working for you. Yes, I said working for you. Sometimes in the process the working relationship can get a little muddy. But, who ever you choose as a lender or agent, they are working for you, not the other way around. If you have worked out your budget and know you cannot afford a house for more than $300,000 and your agent is showing you homes for $375,000 and up, you have the wrong agent. Same goes for the lender. If the lender you have chosen is trying to approve you for a loan amount that will strap you if one little thing goes wrong, that's the wrong lender.
One of the best ways to relieve the stress of looking for a home is before you start looking get pre-approved. What that means is that the lender views the necessary documentation it will take to get you approved. From there, he/she can run you through their automated underwriting system to see at what loan amount you will approve at. This way once you know what your upper loan limits are, it relieves you of the stress of guessing whether you can afford that home you just saw in the paper. It is usually just a simple process. All you have to supply your lender is an application, 2 months most current bank statements, 30 days of most current pay-stubs, and 2 years W2's. If you are self-employed, then 2years of 1040's must also be supplied. That's it. From the above documentation a lender will be able to tell you what type of programs and what your maximum loan amount will be that you can approve for.
Now this process does differ amongst lenders, meaning some charge a non-refundable application fee and such. But most, like myself do not charge the borrower any upfront fees to get approved. So next time you're wondering if you can be approved, get your paperwork together and contact myself or another lender and see just hoe much of a home you can afford.
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