“So how do I buy a home?”
As a lender, this is the question I get asked most often from potential homebuyers. While it can feel like a very daunting process, if you are working with the right team of a lender and realtor behind you, it doesn’t have to be. For simplicity, I explain the process in reverse:
Want to buy a home? You need to make a competitive offer.
Want to make a competitive offer? You need to be fully Pre-Approved.
Want to be fully Pre-Approved? You need to talk to a lender.
Talking to a lender should be the first step for any potential homebuyer. A good lender will discuss your goals for the purchase, analyze your financial situation, and come up with a plan for success to achieve those goals with a Pre-Approval.
A Pre-Approval is essentially a guarantee made by the lender on your behalf to any potential property seller that you are a serious buyer. A Pre-Approved buyer has had their credit, income, and assets reviewed thoroughly by the loan officer and their underwriter, confirming they have the down payment funds not only to buy the property, but stable income to make the potential monthly mortgage payments. A Pre-Approval also helps when it comes to shopping for homes, as you and your realtor will know exactly the price points you can afford — no need to drive around looking at houses you can’t afford!
Once Pre-Approved, you can make a competitive offer on a house you love by having your realtor and lender work in tandem to write shorter contract deadlines into the purchase contract and guarantee a quicker closing because all your documents have been reviewed and approved in the Pre-Approval process. Sellers like buyers who can close quickly and have no red flags getting to the closing table. In high-demand markets, if you are not Pre-Approved you essentially take yourself out of the running immediately.
Once your competitive offer is accepted and the clock starts ticking on your quick-closing purchase, all you essentially need to accomplish is finding homeowner’s insurance for your new home. It can now be a stress-free process to the closing table because you are not having to provide income or asset documents that may or may not be accepted by the lender. The Pre-Approval took all the heavy lifting and guesswork out of the equation early!
So, how do you buy a home? Start by talking with a lender!