By Ryan Mennemeier, Mortgage Loan Officer
The prospect of buying a new home for you and your family is very exciting. It can also be very daunting if you are not familiar with how the mortgage process works. The best thing you can do for yourself is to prepare ahead of time, ask questions, and be empowered with the knowledge necessary to make this important decision. Here you will find some common mistakes that borrowers make, as well as how to remedy them.
Not Obtaining a Pre-Approval First
This is extremely important, and can be the difference between being able to secure your dream home and missing out entirely. Sellers will look for a pre-approval from your lender to see that you are capable and qualified for the offer you intend on making for the property. Entering into a discussion without a pre-approval will mean that you will need to go back and acquire one, and hope that another buyer has not already secured the property. By doing due diligence on the front side and having your pre-approval from a lender, you will be preparing yourself for the purchase and be able to make competent offers.
Not Saving for Down Payment
While most lenders will be able to offer you several different loan programs, the concept of closing costs will still need to be addressed. Knowing how much money you will need to close ahead of time will be a key factor in determining the fluidity of the ensuing mortgage process. One of the best things that you as a borrower can do is to prepare ahead of time and start saving some funds so that when the closing costs are quoted, you will be ready to take care of them and be able to close on your home.
Not Checking Credit Score Beforehand
There are several different sites out there that will allow you to view your credit score. This can be a great tool as it allows you to see if there is anything on your report and profile that could be a detriment to you getting pre-approved. This service will also serve as a good bearing marker for planning ahead to see where you stand, and where you could end up as far as your mortgage program.
These are just a couple mistakes that borrowers make with some short and easy ways on how to remedy them. In summation the strategy can simply be put as prepare, prepare, and prepare. By taking a little bit of time and consulting with a lender first to not only seek your pre-approval, but to get a good idea of what the loan project will entail for you and your family, you will be one step ahead and will feel more confident about your future purchase.
Happy house hunting!