When you decide the time is right to buy a home, there are a few things to get in order before you start looking for your dream home! One of the most important things on you to-do list is
Turning The Dream Into A Reality Requires Planning
Before we get to it, please ask the children to leave the room, I'm about to use an F word... FINANCING.
Every person has their own way of planning & dreaming for their future. Whether it's a dream job, dream home, or all around dream life, it requires the combination of planning & action to achieve those dreams. Today I would like to focus solely on the dream of buying a home. It is what I do for a living :)
Looking to purchase a home in many cases is the perfect example of placing the proverbial cart before the proverbial horse. Everyone loves looking at homes either online or going out for a Sunday drive to take tours of homes, or attend open houses. I'm here to tell you this is often the third to last action that you as a home buyer should be taking. Of course one must do their research about where they want to live, what they want their new home to look like, and what amenities that new home will have for them to enjoy as the most major purchase of their life. However, there is a very important step that should be taken prior to ever starting the journey on foot to home ownership. Aside from finding the right agent to work with, but we already know the answer to that question. ;)
Unless you plan on purchasing your home with cash (btw this also requires a proof of funds to be provided when submitting contracts), then you will most likely be financing your home purchase. There are many programs out there that you can utilize depending on how you would like to craft your loan. A professional loan officer would be able to discuss the different loan types and specific programs their lending institution may have available. Thereby assisting you to determine a comfortable monthly mortgage for your new home.
As I mentioned earlier, everyone loves looking at the homes, however, very few want to delve into their financing. I can't blame them, this is the boring, mundane, and often scary part of the home buying process. BUT it is the most important part, and ultimately can make or break your purchase. The home buying process can require a lot of time between searching for the home, acceptance of your offer, and then working toward closing. Because of the time, money, and patience invested, it is a necessity to work with a loan officer that treats your loan with as much care as you will your new home.
If I had a nickel for every time a potential home buyer said to me, "We haven't spoken with a lender, but we plan on doing that after we find the right house", I would more than likely be retired. Unfortunately for me thats not how I earn my keep as your realtor. What do I say to those folks who feel the financing is secondary? To quote the 45th President, "Wrong!". Of course, I don't say that, but I can't stress enough the importance of meeting with a qualified loan officer prior to ever starting your actual home search.
First, it's not obligatory. That's right, you can have an obligation free conversation with a loan officer to ask your loan related questions, and determine a sales price range based on your comfortable monthly mortgage. Now, once entering into a binding contract to purchase, there is a time frame in which you must make a full application to a lender, but again, ideally this was already initiated prior to writing an offer.
Second, sellers generally will not even entertain an offer without a viable pre-approval letter from a legitimate lending institution. Now keep in mind, you can go on the internet and find lenders who are willing and ready to "approve" you for a loan without really doing any research on your financial information. These types of pre-approvals are not helpful to you as a consumer. Inevitably, there will be more discovered by the lender much further into the process to closing that really should have been discussed at the beginning.
Third, it is literally the key to successfully purchasing a home. You can write a million contracts, and have them all accepted, however, if you have not met with a loan officer to determine your qualifications to buy then more likely you will never see closing day. This is important because real estate contracts come with agreed upon time frames and dates that must be met in order to avoid "DEFAULT". To avoid going off topic, just know "DEFAULT" is NOT where you as a buyer want to be.
There are an array of other reasons for meeting with a lender once the idea of buying a home enters your mind. I understand financing is not the most enjoyable process for many, but it is without a doubt the most essential step for anyone looking to buy their next home. Ultimately, you will avoid major delays, and stress from working on your financing at the very beginning.
It's a lot like working out, very few actually enjoy it, but in the end it's the best thing for you.
Thank you for spending the time to read this!
Need assistance with the home buying process? Give me a call, and let's see how I can be of service!
You don’t choose a home because you love the paint color. No, an investment this big demands in-depth knowledge so that you can buy with confidence. That’s where I come in. As an agent with Berk....