When purchasing a home, considering all your financial options can be an overwhelming process. Fortunately, we at the Conna O’Donovan Real Estate are prepared to guide you through the intricate process to bring you to the most affordable financing solution. When choosing a mortgage and lender, be prepared for the following steps, and remember to address the issue early, so you are ready for negotiations with a pre-qualification letter in hand.
HOW MUCH ARE YOU WILLING TO SPEND?
The first thing to consider is how much your budget or desires will allow you to spend on your new home. Use a mortgage calculator to calculate monthly payments of a home mortgage loan, based on the home’s sale price. With this information, you can determine how much you can afford to borrow, taking into account your income and current interest rates. Don’t forget to include taxes, insurance, HOA fees, utilities, and any other expenses that are required to pay when owning a home.
APPLY FOR A LOAN
Now that you know how much you can afford, you are ready to begin the loan application process. Be sure to shop around before finalizing your decision. You can choose from our list of Preferred Lenders to see who our clients have worked well with before. We usually recommend considering local and small lenders who can provide you with the customer service and guidance you need during the financing process. Having easy access to a representative is paramount to ensuring smooth loan delivery. Remember, begin this process early, well before the contract so you are not under any time restraints.
When applying for a loan, the lender reviews your credit score and financial investments to determine how much you are able to borrow. The conclusion they make will ultimately influence your home search with their loan limit, and deliver you with a pre-qualification letter.
When you submit a pre-qualification letter with your offer, sellers take you more seriously because you have the backing of the lender verifying your ability to purchase the home. Even more compelling than the pre-qualification is a pre-approval letter, which indicates the lender has already done further work to
ONCE UNDER CONTRACT
After you acquire your pre-qualification or pre-approval letter, submit your offer, and are under contract, you’re ready to continue with the process securing a loan. Be ready to provide the necessary documentation to support your finances and answer the questions asked to verify your statements. Banks and lenders are now under heavy regulation, and require a thorough background check to approve a loan. Once finished, you’ll have you’re loan and be ready to close on your home. For more information about the process between signing a contract and closing on your new home, see our Contract to Close Checklist.