JSOnline: Shop for loan, then a house
When buyers approach me to assist them with their real estate needs, the first question I ask is if they have met with their lender to discuss their purchasing power. A smart investor purchases stock only after he or she creates a budget plan. How do you know how much you can invest without doing a budget? This same philosophy applies to real estate. For many people, their home is their largest, most valuable investment. When you see your next home this way, you will then realize the importance of establishing your budget.Jack Ablin, chief investment officer with Harris Private Bank, agrees. "Buy the mortgage before you buy the house. Get that set, get the terms right, and you'll have a better understanding of the affordability, and you'll be an attractive buyer because you can seal the deal." At the end of the day, my job is to communicate to the seller that you are a ready, willing, and able buyer and that you are in a position to purchase their home. The best way to communicate your financial position is to show them that you have taken the time to obtain a pre-approval letter from your lender.
Joanne Cleaver, writer for The Milwaukee Journal Sentinel, provides additional suggestions:
1) Keep your credit record clean
2) Start saving your pay stubs and other evidence of your income and assets
3) Use your mortgage prequalification to negotiate the best price
4) Borrow less by putting down a bigger down payment
5) The bigger the down payment, the more confidence the lender will have in your intention to repay the loan
Before shopping for homes, take the time to obtain a pre-approval letter from your lender. This will help save you time and frustration. There is nothing more frustrating and discouraging than seeing homes that are priced higher than what your lender is able to provide.
Pre-approval letters do not last forever. Interest rates are frequently changing. Mortgage company policies are also changing daily. One of the reasons why so many buyers are struggling obtaining loans in the current market is a result of mortgage companies tightening up their lending policies. It is very important to keep your pre-approval letter current and to act within a reasonable time of receiving your letter.
Please contact me at dray@shorewest.com or (414) 412-7980 if you have any questions regarding the home-buying process.
Cleaver writes more about the importance of shopping around for a loan first. Click here to read the entire article>>>
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Labels: Real Estate
posted by David Ray @ 4:03 PM
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