7 Steps for Success When Buying a Home (Step 3)

I recently wrote to you about my "7 Steps for Success When Buying a Home" plan, which assures you a hassle-free home purchase. I explained Step 1: Establish Your Needs and Wants. I also explained Step 2: Determine How Much You Can Afford.

Today let me explain the next step and its importance in your home purchase plan.

STEP 3: GET PRE-QUALIFIED OR PRE-APPROVED BY A LENDER

You can save yourself time and heartache by meeting with a lender before you start your search for a home. A lender can let you know what specific loan programs would be best for you. He can also help you understand what it takes to qualify for the loan that you want. By taking a look at your financial situation and looking at your credit history, a lender can usually give you a good idea if you can qualify for the loan amount that you want. Many lenders call this ‘Pre-Qualifying A Buyer.’

To be absolutely certain that you can be approved for a loan, you may want to ask to be “pre-approved.” In the approval process, all of your documentation is completed and submitted to an underwriter. The pre-approval that you will receive is an actual loan commitment from a lender - your guarantee of loan approval.

It is important that you are 99.9% sure you will get the financing needed and your lender will be able to perform according to the time limits in a purchase contract. If not, you could end up in the middle of an escrow and find out otherwise. If this happens, you could lose your deposit, which could be as much as 3% of the purchase price. Ask for current references and check them. Ask references if there were any problems during escrow and did escrow close within 30 days?

That covers the third step. In coming days I will follow up with additional blog posts that explain the remaining steps to my 7 Steps for Success in a hassle-free home purchase. Here is a reminder of all seven steps:

7 STEPS FOR SUCCESS WHEN BUYING A HOME:

1. Establish your needs and wants. 
2. Determine how much you can afford. 
3. Get pre-qualified or pre-approved by a lender. 
4. Find a good real estate agent to help you. 
5. Find a home that meets your needs. 
6. Make an offer to buy a home. 
7. Save as much as you can on your initial investment.

Powered by Real Estate Digital, LLC. All rights reserved.