Get pre-qualified. I can recommend a trusted loan officer.
Despite what first-time buyers expect, pre-qualification is often a snap. It's often free and quick to confirm; and yet, it greatly increases your bargaining position when it comes time to put a contract down on a home. The fact of the matter is that if you are not pre-qualified first, you could easily lose out on getting your dream home.
Figure out your assets -- primary and supplementary sources of income, investments, etc. -- all of which will convey to your loan officer that you will be able to make the monthly mortgage payments on your new home? Consider such sources as overtime pay, bonuses, commissions, alimony, child support, disability, weekend jobs, etc. You'll also need to prove to your loan officer that you've established a steady history at work -- that you've remained at your current and previous places of employment for a respectable period, and that your income is steady and not subject to cyclical or seasonal factors.
Obtain a copy of my credit report?
It's almost frightening how detailed our credit reports are. Your objective is to put before your loan officer a two-year history of prompt payments on all of your debts. If you're young, you might very well have an immaculate credit history (restricting yourself to a single credit card is a good start); although young people certainly have been known to charge their way to bankruptcy. If you've ever fallen behind on your payments for a legitimate reason such as illness, speak to your loan officer and work together to make sure you provide a thorough explanation. Being forthright could result in your credit history being cleared, paving the way toward loan approval.
What are your options for loan programs and down payment terms?
Many first-time buyers are opting to take advantage of the increasingly popular 3% down bare minimum. Twenty percent is great if you can swing it, but particularly for first-time buyers, coming up with 20 percent of the sale price can be an impossible dream. Today more than ever, it's becoming easier for first-timers to become qualified and obtain reduced closing cost options. Investigate your options concerning interest rates -- either fixed, remaining the same for the life of the loan (15 or 30 years) or adjustable (fluctuating or reducing according to national interest rates). In an accompanying piece, we'll discuss a few more critical questions first-time homebuyers should ask themselves, their Realtors and/or their loan officers.
Direct:
(530) 966-4265
E-mail: djunco@chico4sale.com
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