Buyer Tips, Part 1: Getting Your Lender’s Stamp of Approval
Not everyone is blessed with the ability to purchase a home with cold hard cash. The reality for many people comes with that monthly mortgage payment. For today’s home buyers, getting approved for a home loan can seem insurmountable, but there are many things you can do ahead of time to make the process a little easier for yourself.
1. Work with a trusted lender. Not all banks are created equal, and just because the interest rate sounds appealing, there are many other factors that go into “sealing the deal” on a home. Some lenders are excellent at reeling you in, but when the rubber meets the road, they may not be the best at executing the loan package and ensuring a timely closing. If you have a good relationship with your personal bank, start there. Chances are, that they will work harder for you because they want to continue the existing relationship. You can also ask around – reputation is everything, and closing attorneys, real estate agents, and fellow co-workers could all give you recommendations on who to begin your search with and who to stay far away from, when it comes to securing a loan.
2. Pay off debt (or not…). Credit card debt? Car Payments? While they may not seem like a big deal, banks look at these items as a part of your bigger financial picture. Depending on your financial situation, your lender may ask you to pay off some of your debt. On the other hand, don’t do this before consulting a lender as there are times when keeping the debt can be beneficial. Most importantly, do not incur any new debt during the home buying process. There are many other “hurdles” to overcome in the mortgage process. This article offers other helpful tips.
3. Know your price point. When you go shopping for food or clothes, you usually have a budget. Shopping for a house is no different. Talk with your Realtor about what’s doable for you financially as opposed to stretching your price point to where it becomes uncomfortable.
Disclaimer: Every person’s situation is different. Check with your preferred lender for all financial advice.