The first step in the home buying process is obtaining a mortgage pre-approval letter. This is a letter from the lender stating that you are qualified to borrow up to a certain amount at a specific interest rate, subject to property appraisal and other requirements. Having a pre-approval before you go house hunting will give you a better idea of the homes you can afford, and will give you the best possible shot at getting the home you want and deserve.
Before you begin the pre-approval process, it is a good idea to check your credit report and look it over thoroughly. This will allow you time to check for errors and to resolve any issues you may find.
Be prepared to provide pay stubs, W-2s, and tax returns from the last two years, and all documents showing any additional income. Additional income includes overtime, commission and bonuses, interest and dividend income, Social Security, VA and retirement benefits, and child support and alimony. It's best to gather all necessary documents ahead of talking with a lender.
You will need to provide bank statements and information about investments made. If a family member is giving you money for a downpayment, you must have a letter stating the money is a gift.
Be sure to have a valid form of identification, as well as your Social Security number for the credit check.
RESEARCH LOAN OPTIONS
Buying a home is often one of the most expensive endeavors people take on in their lifetime.
It's not surprising that saving for a down payment is a major hurdle for most people, especially first time home buyers. While a 20% down payment is ideal, it isn't as common as you think, nor is it necessary in order to purchase a home.
A larger down payment does have benefits—avoiding the cost of private mortgage insurance, a lower interest rate, faster equity, and a lower monthly payment.
Finding the right loan can seem complicated, but we will work closely with your lender to determine the best option for you.
MORTGAGE BROKERS VS. BIG BANKS
The big banks and most online lenders have only limited access to their own mortgage rates and terms. You may see advertisements with discounts on their rates, but you are responsible for negotiating these rates.
On the other hand, mortgage brokers have access to multiple lenders and mortgage products. They shop around for the best mortgage terms tailored to you individual circumstances. Mortgage brokers negotiate for you, and they present you with the lowest rate on the market.
LOOKING FOR A LENDER?
You are free to use whomever you'd like, but we highly recommend using a local mortgage broker. We’ll help you find the best local loan officer to get you competitive rates and programs that best fit your individual needs. If you don’t already have someone in mind, we partner with some of the best lenders in the industry, and we’d be happy to introduce you.