- Employment at the same job with steady income! It is best to be employed at the same job, company, or same industry for at least 2 years with steady income during that time period. If you are in a sales position or a business owner, the lender might require a little longer amount of time to provide a steady income period.
- Know your credit score! This is important because the higher the credit score the better the interest rate and loan you will qualify for. There are 3 major credit bureaus you can check, Experian, Equifax, and TransUnion. Be sure to get a credit report and review the report to ensure, you`re personal information, overall credit usage, and debt history is accurate. This is we`re you can find possible inaccurate negative public reports or collections. If you find any incorrect information you want to start to get it resolved and removed from the reports. Get everything in writing and the person name whenever you are working with a company or person to resolve and remove an item, this is so important! You want to have the strongest credit possible before talking with lenders.
- Start saving for a down payment! The down payment is the amount the lender is requiring for you to secure the loan. The lender and you will decide on the best type of loan for you, based on your needs. The different types of loans will each require different amounts of down payments, VA loans are zero down, FHA is around 3% (of the home sale price), and Conventional will have a range of down payment options. Work with the lender for your loan type and down payment.
- Make sure to have some additional funds to cover the cost of items in escrow! When you find your dream home and get an offer accepted to purchase the home, you will have some cost which you will need to pay during escrow. The first cost to you will be a home inspection which runs around $325.00, then you will have an appraisal which cost around $450.00. If you decide to do some additional inspection`s you will have some additional cost.
- Start to get some ideas! This is we`re you want to start thinking about where you want to live, what type of home you want, what features you would like in the home, and any other quality of life feature you must have or would like. Your plan does not have to be perfect you`re Realtor will help you to complete the plan and strategy.
- Find a Realtor! This is an important part you want to find someone with local experience-they need to know the market and area to share all the benefits of the area. A full-time realtor- a lot of Realtors have another job this will affect you when you need to view a new home quickly or need to talk to them. It could also affect you getting an offer submitted quickly and exposing you to the possibility of losing your dream home. Available 7 days a week and evenings- you may need to view a home or several homes at certain times or certain days and if your Realtor only works certain times or days this could mean you lose out on your perfect home. Answers their phone- you want a Realtor you can talk to when you have a question or when you are available to talk. Has completed lots of transactions- experience is critical to a smooth transaction and to getting you the best terms of the purchase.
A knowledgeable and experienced Realtor knows what to look for and may see opportunity more then a less experienced Realtor. Has the best systems in place to service you- every Realtor has a way they service their clients, make sure they have systems in place to handle the way you want to be serviced.
- Find a lender! Decide on at least three lenders to get a mortgage quote from. Make sure to interview all three lenders within a three-week time period, this will make sure your credit score is not lowered because someone is pulling your credit. The credit agencies want you to look at different lenders because it is a big purchase so they will not hit your credit with negatives if you are in that three-week window.
Talk to each loan officer, build a relationship with them, they are potentially going to give you the money to buy your dream home. If they like you it will go a long way and might help you out if you need some additional help.
Make sure to get a loan that is aligned with your goals of buying your home. Work with a professional Realtor to help you create your goals before you purchase. If it is a short-term purchase 3 to 5 years you would want to get a loan that best represents a short-term purchase. If you are a long-term buyer, the loan should represent that type of purchase.
Each lender you meet with will provide you with a loan estimate, this is what they charge, their rates, what type of loan they think is best for you, and the terms of the loan. It might have some different options with loan type or down payment amounts, but it will give you a clear understanding of what they are offering you. If you do not understand what they are offering like loan cost, rates, type of loan, down payments or other items then it might be a good idea to move on. Understand the money part!
Always ask your lender these questions in the beginning.
1. Will they read the Residential Purchase Agreement (Your offer to the seller)?
2. Do they follow the dates on the Residential Purchase Agreement from start to finish?
3. Are they available after 5 pm and weekends?
4. If they are having delays will they communicate to you and your Realtor?
5. If they cannot get something completed will they communicate to you and your Realtor?
You might think these are odd questions but the answer your lender gives you will give you an insight if you will close on time or close on the purchase.
The lender will be asking you for documents in the start of your loan process and often they will be asking for documents throughout the process. Make sure to provide them to the lender in a timely manner, without some documents they cannot move forward with your loan. They will not ask you for a document unless they need it so don`t get mad if they are asking, they need it.
Do not make any large purchases until you have closed on your new home. If you are not sure to buy it or wait, call your lender to discuss.
Secure your pre-approval in the beginning, then make sure to sure your loan. YOU DID IT!!!
- Start cleaning out cutter! You are moving soon and will need to pack up all your things. Over the years you would be surprised how much stuff you accumulate, once you start removing items from cabinets, storage, and closets it might shock you. Here are some options with things you don`t want to take with you to your new home, do a garage sale, donate to a local charity, or place in the trash.
- Start collecting boxes! When you are moving you never can have enough boxes!!! Check in with your favorite grocery store or most of any large box store will always have boxes, just ask if they would save some for you.
10. Start collecting boxes! When you are moving you never can have enough boxes!!! Check in with your favorite grocery store or most of any large box store will always have boxes, just ask if they would save some for yo