Important Steps To Getting A Home Loan

If you are buying a home and not paying cash, you will need a mortgage! Many people do not understand how to get a home loan. I am here to walk you through some simple steps and teach you how this process works.

1.Improve Credit Score

The first thing you want to focus on is improving your credit score. Lenders give the best mortgage terms to people with the highest credit scores. Now some of you might ask what is a good credit score. If your credit score is between the 300-620 range you are probably not eligible for a mortgage. No need to worry, you can always improve your credit score! If your credit score is between 650-800 chances are you will get approved for a mortgage.

2. Deciding On Your Budget

The next step to getting a mortgage is deciding on a budget. A good rule of thumb is to look for homes that cost no more than three to five times your annual household income. Banks have been known to go as high as ten times your income, but it is up to you and what you decide to spend. Just because you can, doesn't mean you should.

3. Choose A Bank And Get Pre-Approved

After deciding on a budget, I recommend you do some research on which bank will give you the best interest rate. After you find a bank with a great interest rate, the next step is to get pre-approved. To get a pre-approval letter you must contact your lender. The pre-approval acts as a tentative commitment from the bank. To get one, you'll have to show the lender documentation of your income, assets, and debts. This letter will be used when making an offer on a property.

4. Decide Loan Type

After getting your pre-approval letter, I recommend you decide what a loan type. Conventional, FHA, and VA are all types of financing. I will be doing another blog soon to discuss the difference in the types of loans.

5. Shop For A Home

Next step is the most exciting, TIME TO SHOP FOR A HOME!!! Being a realtor the best advice I can give you is to take as much time as you need to find the right home! Purchasing a home is a big investment and you want to be happy with your choice. Here is where I come in! If you need help finding a home I would be more than happy to assist you! Being a realtor, I have the advantage of seeing all of the homes on the market with a database called the MLS. I take your wish list that you have created and research the homes on the market that meet your wishes.

6.Place An Offer

After we find the perfect home, it is time to place an offer! I will work with you to negotiate a fair offer based on other homes in the same neighborhood! If our offer is accepted, then we will start the inspection process and get everything else that we need to taken care of before closing. During this time period before closing make sure you hold off on all large purchases until after settlement.

&. Close The Sale

Last but not least we will close. During closing you will sign all of the loan documents required to complete the purchase. It typically takes a few days for your loan to be funded after all of the paperwork is completed. Either way you will received the keys to your new homes at closing!