Love Buying a Home Series

The “Love Buying Your Home” series will take you step-by-step through the entire home-buying process — from finding a buyer’s agent to settlement day, and even to maintaining your home after you’re all moved in. Every first-time buyer will find this information-packed series easy to follow and understand. Make sure to tune in for the next few weeks!

The lending process can be complicated and hard to follow for even the savviest buyers. It doesn’t help that loan options are constantly changing!  There are a lot of loan options out there, but I can help you make sense of them all. Plus, I work with great lenders who have low rates and offer loan programs that are ONLY available to first-time buyers.  I can suggest a few for you to talk to and compare the options.  I can also review your loan options with you and help you make sense of what all the numbers mean.

1. Evaluate how much you are comfortable spending monthly

Remember, you don’t want to get approved for the highest price you can, that’s not helpful. You want to get approved for and understand all the numbers at the monthly payment you want to pay per month. Huge difference. Many of my clients will get approved for a higher PURCHASE PRICE than they are comfortable spending on a MONTHLY MORTGAGE, because it may require them to change their lifestyle a bit. Just make sure you understand the numbers. If you need a little help with that, bounce back to the previous article “Do The Math… A Mortgage You Can Afford”

Lenders will look at a few things when determining how much you can qualify for monthly, but they will mainly focus on your debt and income. Your lender will probably refer to this as your “debt-to-income-ratio”

2. Find a loan officer – interview multiple

My biggest piece of advice here is to find a local lender that you are able to meet in person. There are a lot of big online lending companies that you will probably come across that advertise very low interest rates… but if it sounds too good to be true, it probably is. Before proceeding with one of these companies make sure to check the APR, they typically have much higher fees. Your agent does this a lot, so ask your agent if they have any recommendations.

Most local lenders will give you a very similar interest rate and similar loan programs, so choose someone that has great customer service and will be able to carry the loan to closing.

3. Discuss loan options with your lender – choose the one that best fits your personal situation

It’s definitely not one-size-fits-all these days. There are many different loan programs that can make it easier to get into a home if you fit the criteria. In Utah, we have: FHA, VA, USDA, Utah Housing, as well as Conventional loans. Deciding what type of mortgage is best for you depends on your personal situation, your financial scenario, and your future plans.  Your loan officer will help you determine this, but I can help answer quick questions as well. Be sure to let your agent know what kind of a loan you have decided on because it will determine how we write the offer.

4. Get Pre-Approved

Be sure to do this before you start looking at homes. Getting pre-approved will make sure that you are shopping in the right price range, and hopefully clear up a lot of the “un-known’s” with a mortgage. After you choose your loan officer you will submit an application along with your documents. The most common documents needed for a pre-approval are pay stubs covering 30 days, 2 month bank statements, two years of W2s/1099s, and tax returns.

We will need your pre-approval letter when we submit offers as well. We will send it to sellers attached to your offer to let them know how committed you are, and that you are actually able to purchase the home. This puts you in a much better position when you submit an offer.

5. Lock in your interest rate

After we get an offer accepted and we are officially under-contract, your lender can lock in your interest rate. This is great to get on top of early, especially in a market where interest rates are rising, similar to what we are experiencing now.

If you want to know what loan program is best for you (there are even some that don’t required private mortgage insurance payments, even if you don’t have 20% down—Yessss!), let’s talk more at your convenience.

Keep coming back here each and every week to learn more about the home buying process and reach out to me through email at mccall@youragentmccall.com anytime with questions about how what you are learning applies to YOUR specific situation.  Just like every real estate agent is unique, so is every buyer and I’d love to help you apply what you are learning in this series to YOUR home buying plans.