Buying a home is one of the biggest, if not the biggest, investment you will ever make. This in itself can make the home-buying process stressful. Add that to the fact that you need substantial financing for this purchase, and you may have a full-blown headache on your hands if you're not careful.
If you're not sure whether or not you should be contacting a lender, when the right time to apply for a mortgage is, or how much house you can afford, you've come to the right place. There are a number of steps to be taken when purchasing a home, and if these steps are taken out of order, you can run into serious trouble.
It's essential to get a qualified, professional broker involved in your home-buying process as soon as possible. Not only will a qualified broker be able to help you with the steps involved, they can guide you through the process, ensuring all steps are taken in the appropriate order.
The first thing you want to do when you decide to purchase a home is get pre-qualified by the mortgage broker you're working with. A pre-qualification is not the same as a pre-approval. The main purpose of a pre-qualification is to determine how much home you can afford. With a pre-qualification, you will know what houses are in your price range and which ones aren't. This way, you don't waste any time on houses that aren't within your financial reach.
Once you have been pre-qualified, you can begin your home search in earnest and at this time you may want to become pre-approved for the loan amount that you were pre-qualified for. This is the time to research your options and find out what financing solution will best fit your needs. There are a number of mortgage options available to consumers, and finding the one that's right for you may take a little research. Once you find out which mortgage option is right for you, you can then take the first steps in the pre-approval process.
A pre-approval will enable you to present your sellers with a pre-approval letter when you make an offer on the property you would like to purchase. This can also give you added negotiating power since the sellers will know that you are a serious buyer. If you do apply for pre-approval, you will need to apply for your mortgage loan when you find the house you want to buy and the offer you make will need to be contingent on financing approval.
The pre-qualification process should not cost you anything in regards to fees. However, the pre-approval process may incur fees such as a processing fee or a charge may be incurred if for some reason you do not obtain a mortgage through the company you are applying with.
Once you have found the home you want and have obtained financing, it won't be too long of a wait till the property is yours and your all moved into your new home. By following the above steps in order and working with a knowledgeable broker, the process will have been streamlined and painless.