Dealing with Financing
Most home buyers will need to borrow in order to purchase a home, because let’s face it…writing a check for a house would be awesome, but not in the cards for many of us! Here are some general thoughts and tips on mortgage financing and how to get ready to make the big purchase.
Get pre-approved. By getting pre-approved as a buyer, you can make sure you’re not wasting time looking at houses you can’t afford. You can also put yourself in a better position to make a serious offer when you do find the right house. Unlike pre-qualification, which is based on a cursory review of your finances, pre-approval from a lender is based on your actual income, debt and credit history. By doing a thorough analysis of your actual spending power, you’ll be less likely to get in over your head and be ready to act when you find that right house.
Find a lender and loan officer you like. It’s a good idea to talk with at least a couple lenders before choosing where to apply for your loan. Different banks have different loan products and rates they can offer (see below). Finding a loan officer who understands your situation and who you feel will communicate well with you is very important. Your bank where you have your checking / savings account is a good place to start, but there may be a bank out there that’s a better fit for your mortgage. And asking if your bank can match a rate is a perfectly fine question to ask as well.
Choose your mortgage carefully. 30 year fixed? 7 year ARM? VA Loan? There are a lot of products out there when it comes to a mortgage loan. Your lender can help you sort through the option that fits your income, timeline and financial plan the best. Sometimes the safe, 30 year fixed is best…other times, if you think you’ll move within 5-7 years and sell the house, maybe an adjustable rate loan would save you some money on the rate. Ask questions, get thorough answers, and you’ll feel much more comfortable borrowing the money when you have a good plan.
As you begin your moving / buying process, we can help you connect with some of the area’s best lenders so you can compare rates and products. Or, if you just have more questions on where to start, give us a call.