The vast majority of today’s home buyers will need help financing their purchase. If you’re one of them, here are several tips that will help you obtain the right mortgage for you.
Know your credit score
It’s important to know your credit score because lenders use this measurement as an indicator that you will be able to not only handle a mortgage, but have the financial maturity and track record to make your mortgage payment every month. They also use your credit score to determine what kind of interest rate you will qualify for. It’s important to check your credit score once a year to check for errors – which happen more often than you might think. Click here for a good resource guide for learning more about your credit score.
Before house hunting get pre-approved (not just pre-qualified)
There is a difference between getting pre-qualified and pre-approved. Pre-qualification means a lender has had a quick look at your personal finances and believes, without looking at details, that you would perhaps qualify for a home loan. Pre-approval means that the lender has taken an in-depth look at your finances (based on your actual income, debt and credit history) and can give you parameters on how much home you can afford. When negotiating with sellers – especially when there’s a good chance your offer might be one of several offers on a home – having a pre-approval from your lender puts you in a strong negotiating position.
Shop for lenders and ask for referrals
Buying a home is an expensive purchase – it’s important to not only find the right home for you, and at the right price, but to find a lender that will work with you to obtain the best loan for you based on your finances and lifestyle. In the old days, lender options were limited to the bank on the corner. Today, you’ll find loans through traditional banks, through individual mortgage brokers and even through online portals. The right lender can completely transform your mortgage-buying experience, so it’s important to talk to several lenders. Additionally, be sure to ask for referrals and testimonials from your real estate broker and your friends/family. Just because a lender quotes you the lowest interest rate and loan terms does not necessarily mean that you’ll receive the best customer service. And when possible, personally meet with lenders to see who you feel the most comfortable with. Mortgages can be complicated and you want someone on your side who you trust is working hard for you.
If you’re thinking about buying a home – and you’ll be looking on Whidbey Island – be sure to visit our Whidbey Island Windermere website. Our site has tons of information and resources to help you including a ‘homes for sale on Whidbey Island‘ search function, market information and sales data, information on our communities, and a contact page where you can reach out to one of our knowledgeable and experienced brokers.