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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.
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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 |
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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.
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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.
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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?
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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?
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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. |
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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.
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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. |
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