Where do I start?

Get Pre-Approved for a Mortgage

Before you start home buying, you should seek a pre-approval letter from a lender for a home loan. This is where you meet with a loan officer, ideally a few at various mortgage companies or credit unions. Each mortgage lender will scrutinize your financial background—such as your debt-to-income ratio and assets—and use this info to determine whether they're willing to loan you money, and what size monthly payment you can realistically afford. Let the lender know how much you are wiling to pay a month with mortgage, property taxes and home owners insurance. This will help you target homes in your price range. And that's good, since a purchase price that's beyond your financial reach will make you sweat your mortgage payment and puts you at risk of defaulting on your loan.

As a buyer, keep in mind that mortgage pre-approval is different from mortgage pre-qualification. Being Pre-qualify you're undergoing a much simpler process that can give you a ballpark figure of what you can afford to borrow, but with no promise from the lender. Getting pre-approved is more intense since you'll have to provide more paperwork, but it's worth the trouble since it guarantees you're creditworthy and can truly buy a home.

Before you meet with a lender, one step as a buyers you can do, to give yourself a better understanding of what you can afford as a monthly mortgage payment is to plug your information into an online home affordability calculator. This will calculate the maximum amount you can afford as a monthly payment.

Advice for First-Time Buyers

Pre-Qualification: Meet with a mortgage broker and find out how much you can afford to pay for a home. *Best to get a pre-approval.

Pre-Approval: While knowing how much you can afford is the first step, sellers will be much more receptive to potential buyers who have been pre-approved. You’ll also avoid being disappointed when going after homes that are out of your price range. With Pre-Approval, the buyer applies for a mortgage and receives a commitment in writing from a lender. This way, assuming the home you’re interested in is at or under the amount you are pre-qualified for, the seller knows immediately that you are a serious buyer for that property. Costs for pre-approval are generally nominal and lenders will usually permit you to pay them when you close your loan. When talking to the lender, let them know what you are comfortable with on a     monthly basis (example, mortgage payment, property taxes, homeowner’s insurance, ext., no more than $1,800 a month) other wise they may tell you that you can afford a higher priced home and you may be paying $2,300 a month. 

List of Needs & Wants: Make 2 lists. The first should include items you must have (i.e., the number of bedrooms you need for the size of your family, a one-story house if accessibility is a factor, etc.). The second list is your wishes, things you would like to have (pool, den, etc.) but that are not absolute necessary. Realistically for first-time buyers, you probably will not get everything on your wish list, but it will keep you on track for what you are looking for.

Representation by a Professional: Consider hiring your own real estate agent, one who is working for you, the buyer, not the seller.

Focus & Organization: In a convenient location, keep handy the items that will assist you in     maximizing your home search efforts. Such items may include: 

1. One or more detailed maps with your areas of interest highlighted.
2. A file of the properties that your agent has shown to you.
3. Paper and pen, for taking notes as you search.
4. Instant or video camera to help refresh your memory on individual properties, especially if you are attending a series of showings.
5. Location: Look at a potential property as if you are the seller. Would a prospective buyer find it attractive based on school district, crime rate, proximity to positive (shopping, parks, freeway access) and negative (abandoned properties, garbage dump, source of noise)      features of the area?

Visualize the house empty & with your decor: Are the rooms laid out to fit your needs? Is there enough light?

Be Objective: Instead of thinking with your heart when you find a home, think with your head. Does this home really meet your needs? There are many houses on the market, so don’t make     a hurried decision that you may regret later.

Be Thorough: A few extra dollars well spent now may save you big expenses in the long run. Don’t forget such essentials as: 

1. Include inspection & mortgage contingencies in your written offer.
2. Have the property inspected by a professional inspector.
3. Request a second walk-through to take place within 24 hours of closing.
4. You want to check to see that no changes have been made that were not agreed on (i.e., a nice chandelier that you assumed came with the sale having been replaced by a cheap ceiling light).

All the above may seem rather overwhelming. That is why having a professional represent you and keep track of all the details for you is highly recommended. Please email or call me directly to discuss any of these matters in further detail.