Unless you are buying your next home with cash, you will likely be paying with a combination of cash (down payment) and a Mortgage.
You've decided that you do, indeed, want to proceed with this process of buying a house (Step 1) . . .
and you've selected A Vital Few REALTOR of Pareto Realty to represent you throughout the process. (Step 2)
This 3rd step is the commencement of another very important process - Securing approval for your mortgage loan.
It is essential that you Select and commit to a Lender before actively search for your "right house".
The benefits for doing this BEFORE anything else are:
- You are actually looking at properties which fall within your budget.
- You can identify and "fix" any blemishes on your credit report (mis-reportings).
- When making an offer, your negotiating position is very strong (Especially handy when you are "competing" to purchase a property")
- There is significantly less stress on you as you are searching for your house because you are not concerned about your ability to buy
- Once under contract, you can concentrate your attention on the business at hand (inspections) and then relax until the settlement date (rather than scurrying around getting last minute documents together for the lender).
There's enough stress in this whole process already, so attending to the details of loan approval will save LOTS of angst later.
When selecting a source for your loan, we advise that you not focus entirely on the lowest quoted rate. The lending industry has many ways of quoting LOW rates which, after reading the fine print, turn out not being the great deals they might seem to be. If it sounds too good to be true, it probably is. More importantly, remember that your lender will be digging DEEPLY into your personal life, your financial information. This is a person you must trust implicitly. The best place to find such a person is by introduction from us or family/friends. We work with several lenders and would happily introduce you to a reputable lender whose business practices mirror our own. Because this is such a personal aspect of the process, we put a lot of thought into who we refer to whom to be sure it is a good “fit” for your needs.
Visit our Allied Resources Directory for contact information for some of our favorite Mortgage Loan Professionals.
Visit this information about the Lending Process as a "warm-up" prior to meeting with the lender
We have "tested" each of these lenders with other clients. Each will first do a cursory "Pre-qualification" with you over the telephone by asking you your monthly GROSS income (before taxes) and your monthly debt (Car payments, student loan payments, minimum payments due for all credit cards not paid off each month) . . . Apartment rent and utility bills are not considered debts by the lender's definition).
With a "Loan Approval Letter" in hand, you now "have the power" to, with confidence, begin working with your Exclusive Agent to search for your house. Have some fun and some patience during this Search phase, and keep an open mind with respect to your wants and needs.
Begin with general parameters and narrow down from "Area of town" to Neighborhood to specific street to that awesome next house. Beware falling into that trap of requiring "PERFECT" which may add unnecessary frustration.
Enjoy the journey and lean on your REALTOR for advice and counsel