Arrange Financing

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The Wise thing to do…get Pre-Approved!

An important ingredient in a successful home search is knowing how much you can afford whether paying cash or financing. You don’t want to fall in love with a property only to find out it’s outside your price range.

That’s why I recommend getting a Mortgage Pre-Approval if you will need financing. This is a document from your bank or other lender stating how much of a mortgage they are willing to give you based on the financials you provide them. There are two very important advantages to getting this pre-approval:

  • It gives you the peace-of-mind of knowing you can afford homes you view on the market, and won’t have problems arranging financing.
  • It’s a sign to sellers that you are a serious, prepared buyer – which gives you the edge when making an offer. Many sellers will no longer consider an offer without a buyer pre-approval letter.

You can arrange for a Mortgage Pre-Approval with your bank or other lender, or by working with a good mortgage broker. I’m well-connected in the local real estate market, so if you want me to recommend a reputable broker or lender, please contact me.

How Much Home Can You Afford?

Banks and lenders use specific criteria to determine how much of a mortgage they’re willing to offer you. They look at your income, expenses, credit history and employment status, as well as the down payment you plan to make on a home. It may seem like a scary process, but it is actually straightforward. You can usually get a Mortgage Pre-Approval in a day. You’ll be glad that you did.

Loan costs will also differ by the type of loan. The most common loan types are Conventional, FHA, VA, USDA but there are others available in certain circumstances that your lender can discuss with you.

Remember, your monthly home cost includes the mortgage payment including interest, insurance and in certain locations, homeowners association fees (HOA).

By knowing what you can afford, you can confidently shop within that price range. For example, if you qualify for a $250,000 mortgage, and you have another $100,000 available as a down payment, you can look for homes in the $350,000 range.

Qualifying Tips:

  • Check your credit to see if anything is there that needs to be taken care of
  • Hold off on any major credit purchases until after you buy your home, this can affect your credit score
  • Any cash being used as a down payment should be in a financial institution, lenders need to track the source of down payment funds.

Have questions about arranging financing? Please submit the form below, call or email me.

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