Financing Your Home
Remember when you would hear every day about how easy it is to get financing for your next home and how getting qualified to buy a home is easier than ever? That was back before what is commonly referred to as the "mortgage crisis" and the beginning of the recession that began in late 2007. Today's lending standards have dramatically shifted and restrictions on home financing have prompted radical changes in the way buyers approach their next, or many times first, purchase.
Choosing a Lender
If you don't already know of someone you want to use to finance your next (or first) mortgage, the best place to start finding competent mortgage lenders is your own Realtor. Locally, we have plenty of good banks and mortgage brokers that can do just about any financing available in today's market. My experience has been that prospects who decide to go online for their financing options typically run into problems down the road. The lure of the fantastic rates that are quoted up front mask the potentially much higher fees on the back end, causing the final bottom line to be more. Combine this with how much more effort it takes to overcome problems if issues come up, and the final conclusion is to try to stay local if at all possible. We can recommend several great options that have saved our clients thousands of dollars and have provided solid, reliable service along the way. If you already have one you know and trust, that is fine as well, just let us know and maybe we can add that person to our recommended list after your home purchase is complete!
Know your Price Range:
One of the first things you will need to know is what price range you can afford. This will include determining what closing costs may be required, what type of loan is best suited for your needs, and getting that all important pre-approval letter that will be required when submitting an offer on a home. Knowing your upper limit will also help us to keep within that range while we are looking so that you won't have to worry. It is important to remember that what the lender says you can afford based on your income and assets can many times be much more than you can comfortably make payments on when you consider lifestyle expenses. Shopping around for the best rate can make sense as well, only as long as you know the bottom line so that all the fees are considered.
Getting Pre-Approved
One important step prior to making an offer on any property is getting a pre-approval letter from your preferred lender. This will show the prospective seller of the property that you have been diligent about speaking with someone and they have a better idea of whether or not your loan will be approved. This is a very important step in the eyes of the seller since all contracts will be contingent on financing. If you are planning to need closing costs paid on your behalf as part of the contract, getting a good estimate from your lender, prior to the offer, of those costs will be pertinent for how much you request in that offer.
