When it comes to a home purchase, I represent everyone I know…friends, family, my attorney, my pastor, everybody. But I don’t need to know their financial business, nor do I want to; that would make it way less fun and a little bit awkward for both of us.
But unless you are buying a home with cash, you need to think about preparing your finances for your home purchase. I can certainly help with that.
STEP #1 – Ask your agent for recommendations for a reputable mortgage lender, make an appointment, and get your pre-approval letter—BEFORE you begin looking at homes.
If you’ve done your homework in choosing a real estate agent, you should trust them to refer you to a reputable, responsive lender for your home purchase. The result of selecting a lender is going to follow you for about 30 years or until you sell the house, so give it some attention.
At your appointment with your lender, they will explain the different types of mortgage options available to you: Conventional, jumbo, adjustable, FHA, VA, MSHDA, there’s even a specific mortgage loan for physicians, and the list goes on from there. Most people do not know they have options and not all lenders offer the same types of loans!
It’s not all about the mortgage interest rate; it is also about the fees related to that rate. One lender may quote you a lower rate than another, but charge you a fortune in your closings costs to buy that attractive rate. If you can’t match that lender’s rate anywhere else, there might be a reason. Beware.
When you meet with your mortgage lender, they will give you a “Good Faith Estimate.” The Good Faith Estimate discloses, on paper, all the fees associated with the loan they are offering—no surprises.
The lender will explain how much money you will need at closing. How much for down payment, closing costs, and the money you’ll need to reimburse the seller for taxes they have already paid in advance.
The worst thing is to spend your time looking at homes for weeks, find the one you can’t live without only to discover you’re short on the funds for your home purchase.
Your loan rep will also pull your credit report and check your FICO score. Your credit report not only determines whether or not you can purchase a home, but what interest rate you’ll qualify for. Depending on your FICO score and credit history, your credit report can dictate what type of loan you need. Your agent needs this in advance so they can structure your offer accordingly.
This will also expose any mistakes on your credit report that you may need to correct. I once found a loan for a boat on my credit report, and I’ve never purchased a boat in my life at that time!
Getting your mortgage plan together in your home purchase first will allow you to concentrate all of your energy into the fun part of shopping for a house and you won’t have any unwelcome surprises.
We have a whole process to ensure that our Buyers have a great buying experience, and preparing your finances is an important part of that.
If you are planning a home purchase in Oakland or Macomb counties, shoot us an email at Hey@theintegrityteam.com, or call or text us at 248-850-1855 and we can explain our 5-Star process!