The market is HOT right now, and if you follow my blog... you know that NOW is the time to buy. With that being said, there are certain steps you need to take and things to prepare before jumping into the house hunting process.
- KNOW YOUR MONTHLY PAYMENT: The most IMPORTANT thing you need to know before you go shopping for a home is.... Know what your monthly payments are going to be and make sure that You are comfortable with the payment! Many realty websites have "mortgage calculators." Unfortunately, those mortgage calculators are not a accurate picture of what your monthly payment is going to be. There are many variables that affect your monthly payment such as taxes,homeowners insurance, monthly MI, rates, and down payment. In order to get a TRUE depiction of what your monthly payment is going to be, it is important to speak to a seasoned mortgage professional that can qualify your buying power.
- Get a Pre-Approval: Realtors require a Pre-Approval letter before they will show you a home or accept an offer. A Pre-Approval letter from a bank or mortgage broker qualifies the buyer based upon income, credit, and assets. The mortgage broker will review all areas of qualifications, and lets the buyer know what their purchase power is. When people come into my office looking to obtain financing for a home, I review the income, assets, and credit and determine which product and program will best serve my clients to get them financed. In the last 2 years, a ton of awesome products have come on the market, enabling more and more people to buy a home.
- Check your credit score: Mortgage brokers, like myself, will run your credit FREE OF CHARGE. There are also websites out there that allow you to check your score FOR FREE as well. Try myfico.com. When looking to buy a home it will benefit you to know what your score is. You can improve your credit score by paying down credit cards and paying your bills on time.(We will talk about that in another blog) Your score will effect the rate and term of your loan.
- SAVE SAVE SAVE!!! Buying a home will be the biggest purchase of your life. Re-evaluate spending habits and various monthly bills such as cable and car insurance. The more money in your bank account the better!!
- Documents Needed: Once you've made the decision to start the loan applicaion process, there are documents you will need to provide to your mortgage broker, which includes the following:
- Past 2 years tax returns and W-2s
- 2 most recent pay stubs
- Any and all assets
- Past 2 months bank statements