The list of what to know before getting a home loan is long, but it doesn’t have to keep you from taking the first step.
Whether you’re a homeowner who’s re-entering the market after a long time or a first time buyer, knowing the facts is key to your success.
Today, I’m sharing the what, when, and how of getting a home loan. Let’s dive in.
What’s a mortgage preapproval, and why do you need one?
In a post-pandemic market, sellers and real estate agents are unlikely to work with someone who doesn’t have a mortgage preapproval.
It’s paramount to have your mortgage preapproval letter so that you can begin your home search legitimately. It shows sellers and agents that you’re serious. Moreover, it gives you an understanding of how much home you can afford.
Now that you know your purchasing power, you’re able to search, bid, and negotiate with the rest of them.
When should I start looking into getting a home loan?
The first step is deciding to buy a home. Maybe you’re downsizing for retirement, or you’re buying your first-ever property. Whatever your circumstance, when you choose to look into getting a mortgage starts with you.
After you’ve made up your mind, I highly suggest doing the following to ensure you’re ready:
- Take an honest look at your income. How much you’re able to borrow is dependent on several factors, including how much all borrowers make. Think about whether you’re able to finance your “dream” home or whether you’re OK with scaling down your budget.
- Make sure that your job is stable. Changing jobs is a red flag for many lenders who view sudden employment changes as risky. If you’re confident that your income will be stable for the months leading up to your application, then you’re likely ready to move forward. If you’re self employed, don’t worry! You can still get a mortgage, but you will need some specific documentation.
- Keep your debt is at manageable levels. Without paying off your cards completely, keep your debt & balances at manageable levels. Don’t open any new lines of credit while applying for a mortgage and house hunting.
- Be ready to have important personal & financial documents ready. I’ll send you instructions and a document checklist to prepare you for a successful home loan application.
What do all these tips have in common? Stability.
Lenders don’t like to see big financial changes when they’re providing money for a home. The more stable your income, employment, and debt levels are, the sooner you’re able to apply for a home loan.
How do I get started?
Once you think you’re in a position to apply for and sustain a home loan, you should reach out to an experienced mortgage professional, like myself. I’ll explain what to know before getting a home loan and help you through the entire process.
I have professional resources designed to empower you with the knowledge you need to make it in today’s housing market, so don’t hesitate to contact me to get started!