Don’t Be Afraid of the Mortgage Process

    A considerable number of potential buyers shy away from jumping into the real estate market due to their uncertainty about the buying process. A specific cause for concern tends to be mortgage qualification. We get calls from buyers who start by saying “I don’t know where to even begin” or more commonly “I don’t think my credit may be good enough to get a loan.”

    For many, the mortgage process can be scary, but it doesn’t have to be!

    In order to qualify in today’s market, you’ll need to have saved for a down payment (the average down payment on all loans was 11% last month, with many buyers putting down 3% or less), a stable income and good credit history.

    Throughout the entire home buying process, you will interact with many different professionals, all of which perform necessary roles. These professionals are also valuable resources for you.

    Once you’re ready to apply, here are 5 easy steps that Freddie Mac suggests to follow:

    1. Find out your current credit history & score – even if you don’t have perfect credit, you may already qualify for a loan. The average FICO Score of all closed loans in September was 731, according to Ellie Mae.
    2. Start gathering all of your documentation – income verification (such as W-2 forms or tax returns), credit history, and assets (such as bank statements to verify your savings).
    3. Contact a professional – our agents can recommend a loan officer who can help you develop a spending plan, as well as determine how much home you can afford. Our lenders we work with also can counsel you on how to improve your credit score if that’s an issue. We see this all the time – buyers who have good jobs and income but less than perfect credit. We can point you in the right direction on how to raise those scores.
    4. Consult with your lender – he or she will review your income, expenses, and financial goals in order to determine the type and amount of mortgage you qualify for.
    5. Talk to your lender about pre-approval. A pre-approval letter provides an estimate of what you might be able to borrow (provided your financial status doesn’t change), and demonstrates to home sellers that you are serious about buying! Once you find your dream home yes we need this document to show the seller you can afford the home. It’s best to do this early in the search process, not later.

    Do your research, reach out to professionals, stick to your budget, and be sure that you are ready to take on the financial responsibilities of becoming a homeowner.

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