Home Purchase Loans

Get a Loan Pre-Approval

Most realtors require a pre-approval before showing you any homes. Aside from that, there are several reasons why getting a pre-approval should be the first thing you do. First, you’ll find out how much you can borrow, which has a lot to do with how much house you can buy. Find out your options from your lender. Lenders are generally looking for three important factors in determining your eligibility for a home loan:

1. Your credit profile: Score and history are considered

2. Your equity position: Amount of your down payment

3. Your ability to repay the loan: Income sources and stability

Good credit, a sizeable down-payment, and stable income are generally a good starting point, but not always a necessity. If you are lacking in one or more of these areas, don’t lose hope, compensating factors can be considered.

Find the Average Home Selling Prices in Your Desired Neighborhood

Find out what houses are selling for in the area where you want to buy a home. Look at selling prices – not asking prices. You can get these from a real estate agent. When you find a house roughly like the one you want, ask for three “comparables” – recent sales of houses that are roughly your target house.

Find an Agent and Happy House Hunting!

Some home buyers prefer to be very involved in the house hunting while others prefer to let the realtor do most of the legwork. Make sure you communicate your desires with your realtor. Once you have found a house you would like to make an offer on, a good faith deposit is generally requested to be sent along with a formal offer to buy. Once the offer is accepted by the seller, the clock starts ticking for your close of escrow. Make sure you give yourself plenty of time to complete purchase contingencies (such as home inspection and loan approval).

Prepare for the Closing

Talk to your lender before making any large purchases or increasing your debt during this time as it could negatively affect your loan qualification. Make sure you keep all bank statement for at least the most recent three months handy. Avoid adding any large cash deposits to your account during this time to minimize over-scrutiny of your assets by underwriting.

Close of Escrow

Prepare to sign final documents, distribute any necessary funds required for closing, and receive your keys. Congratulations, time to celebrate!