Homebuying 101-

If you're a first-time homebuyer, you're probably eager to start looking for your dream home right away. But before you start house hunting, take these preliminary steps to increase the likelihood you'll be able to purchase your dream home once you find it:

You've already found a real estate professional dedicated to making sure you get the best house for your money.....Val Hansen. Congratulations -- a hardworking real estate professional is one of your greatest assets when shopping for a home.






Check the condition and accuracy of your credit report as early as possible so that it doesn’t come back to haunt you when you’re ready to buy. One good way to check your report is by applying for loan pre-approval as early as possible. Your loan manager will obtain a copy of your credit report as part of the pre-approval process. If you note any errors on your report, immediately write to the credit bureau that produced it and request correction of errors. Supply any explanations that might help improve items within the report. Keep dated copies of all of this correspondence





As a general rule, you can probably afford a house that costs up to two and one-half times your annual gross household income. If you find yourself with less of a loan than you'd hoped, there are a few things you can do to boost your borrowing power:
  • Reduce your long-term debt. Consider putting off the purchase of that new car or accelerate your credit card payments to finish them off before you tackle the loan approval process.
  • Increase your income. Wait for that annual raise. Or take on an opportunity to earn extra income.
  • Weigh your financing options. There are tons of loan programs out there. Even if you are self-employed, have no consistent salary history, or have limited funds for a down payment, you can shop around to find a loan program geared to your needs.


 


Now that you have a good indication of what price range you can afford, Val Hansen can help you select a neighborhood based on recent home prices in different areas. Check out the Area Information section of this site for assistance.

 






The answers to the following questions will help your real estate professional advise you on what type of mortgage best suits your needs:
  • How Much Can I Afford?
  • What Kinds of Loans Can I Get?
  • How Low a Payment Can I Get?
  • How Low a Rate Can I Get?





The following questions can help you evaluate lenders:
  • Speed of Processing: What is the lender’s average turnaround time for processing loans? Does your loan need to be approved by an entire loan committee or is one individual given approval authority?
  • Prepayment: Does the lender charge a prepayment penalty if the loan is paid off in advance of maturity? Does your lender’s low teaser rate loan come with a hefty prepayment penalty? If so, what is the fee and when does it expire?





Now that you’ve chosen a lender and the type of mortgage you want, apply for a pre-approved home loan. The cost for pre-approval may be as small as the lender’s cost to obtain your credit report, but it provides you with invaluable certainty and negotiating power. Pre-approval assures sellers that you are a serious buyer with adequate funds to buy their property. Because your offer is not dependent upon your ability to qualify for purchase financing, you will have a better negotiating position with the seller than other interested buyers.






Having the following documents available will speed up the process of applying for a home loan:
  • Income
    • Earnings Statements from your employer
    • Tax Returns
    • W2s
  • Other Income/Rental/Commission
    • Investment Statements from 401K, Stock/Mutual Funds
    • Deposit records from your bank account
  • Housing Expenses
    • Monthly Mortgage Statement
    • Year-end Tax and Interest Statement
    • Escrow Analysis
    • Check Register or Bank Account Statement
  • Other Monthly Obligations
    • Credit Card Statements
    • Installment Loan Statements—Car Loans, Student Loans
    • Revolving Credit Purchases—Furniture, Appliance

Depending on your circumstances, the following additional information may also be required:

If you are self-employed:

  • Two years' business tax returns, prior year's financial statements, and year-to-date profit and loss. Financial statements may require a CPA's certification.






Once you've been through the steps listed above, you're ready to start house hunting. Contact Val Hansen to help you find the home of your dreams.
 

Valentine Hansen ● REMAX Properties ● Pavilion In The Park
8201 Cantrell, Suite 225 ● Little Rock, AR 72227
Office: (501) 224-4111 ● Direct: (501) 960-4667 ● Toll Free 800-399-2704

E-Mail Valentine Hansen