Financing

Get a Mortgage Pre-Approval

The most important step in a successful home search is knowing how much you can afford.

If you're thinking about buying a home one day, wouldn't it be great to know exactly what you should be doing to increase your purchasing power? If you're ready to pull the trigger now, wouldn't it be terrible to fall in love with a home only to find out you can't afford it?

This is why your first step should always be getting a Mortgage Pre-Approval. This is a document from your bank or other lender stating how much of a mortgage they are willing to give you. There are three advantages to getting this pre-approval:

• It provides a snapshot of your current purchasing power and how you can increase it.
• It gives you the peace-of-mind of knowing you can afford homes you view on the market, and won’t have problems arranging financing.
• It’s a sign to sellers that you are a serious, prepared buyer – which gives you the edge when making an offer.

You can arrange for a Mortgage Pre-Approval with your bank, lender or by working with a good mortgage broker. I've got some favorites, so let me know if you need referrals.

How Much Home Can You Afford?

Banks and lenders use specific criteria to determine how much of a mortgage they’re willing to offer you. They look at your income, expenses, credit history and employment status, as well as the down payment you plan to make on a home. It may seem like a scary process, but it is actually really straightforward.

Here are some little-known facts when it comes to financing:

• You don't need a 20% down payment to purchase a home
• You do need to save an additional 3% on top of the down payment for closing costs
• For 1099 work, you will need to submit at least two years of tax returns for proof of income
• Mortgage payments (unlike rent) cover the previous month, which means you'll get a "free" month after you close.

Have questions about arranging financing? Submit the form on the bottom right or call/email/text me!