First Time Home Buyer Series
Part One: Qualifying for a Home Loan
This blog post begins a three-part series designed to answer common questions and concerns from first-time home buyers.
Lately it’s become impossible to ignore the steady chorus of financial experts urging renters to make the leap to home ownership. From Warren Buffett to Donald Trump, it seems like everyone has gotten into the “Now is the Time to Buy” conversation. But for those who have spent many years renting and are just now beginning to entertain the possibility of home ownership, the idea can be a bit daunting. A friend called me recently to ask for advice about becoming a homeowner. Her real question basically boiled down to this: “Where do I begin?”
If you (or your potential clients) have found yourself asking the same question, this series of blog posts is for you! In this post, we’ll discuss 3 keys to the first step towards home ownership – qualifying for a home loan.
1) Be Personal
The internet is bursting with websites that feature pre-qualification calculators and others tools to help you determine your loan eligibility. While these tools can be useful, they are a poor substitute for personal contact with a lending professional. For one thing, different mortgage programs have different requirements. The subtleties that can make or break loan qualification are things a computer program will be ill-equipped to assist you with. Talk to friends, neighbors, and co-workers who own homes and ask if they had a positive experience with their lender – if they say yes, ask them to help you get in contact with their lender.
2) Be Honest
For some people, finding out if they qualify for anything is a nerve-wracking process. As tempting as it might be to fudge your numbers or in some other way keep certain facts from your lender, this will only end in frustration. Be honest. Tell your lender anything that you think is pertinent, including any changes – for better or worse – that you think might be on your financial horizon. The more information you share with them, the better equipped they will be to help you secure your home loan.
Additionally, if you have questions about how the loan process works, and you surely will, don’t hesitate to ask. A good lender expects these questions and will be happy to patiently answer all of your questions and set your mind at ease.
3) Be Patient
It’s possible that your lender will tell you that you need to make a few adjustments before you will qualify for a loan. If this happens in your case, don’t be disheartened. One of the benefits of having established a personal relationship with a lender is that they will be able to give you specific advice for how to qualify in the future. And that future doesn’t necessarily need to be far off. Oftentimes problem areas can be addressed in a relatively short period of time and before you know it you will have that loan pre-qualification letter in hand!
Tune in next week for Part Two in the First-Time Home Buyers Series: Finding a Real Estate AgentPhoto credit: nikcname