Any borrowers considering buying a home should start preparing years in advance. This 7-step process can save you $1,000's, educate you on the types of loans, and better prepare you for this extremely complicated process.
1. Improve your Credit Score. See my blog post February 10, 2015 11 Tips to Improving Your Credit Score. You can do all this for free over months and years to improve your credit score, saving you thousands of dollars in fees and improving your odds of becoming approved.
2. Budget for the down payment. Owning a home can be expensive if you’re not prepared. Simplify by having a budget and sticking to it. Save for the down payment and anticipate the costs of home ownership. You’ll be glad you did.
3. Find a mortgage lender. You might think it’s too early, but I suggest researching and finding the right lender now, years in advance. By finding a great lender, you will know about many loan programs that provide down payment assistance or have lower down payment requirements. You’ll also learn how to document your self-employed income, down payment gifts from family, etc. This is my area of expertise and where I can help you find the best lender and save you $1,000's in fees or rates.
4. Know the rules for down payment sourcing. Are you going to get a portion of your down payment from friends or family? If so, many lenders require the down payment to be “seasoned,” i.e., in your bank account for 6 months or more.
5. Seek down payment assistance. Do you qualify for a program that helps borrowers with the down payment, such as a bond program or program offered by county, state, federal banks? For instance, some banks are offering a First-time Homebuyers down payment assistance program, providing up to $10,000. California has its own down payment assistance programs. Find a lender that has experience funding these loans, and see if the program is right for you.
6. Research loan programs. If you research various programs, you may find that you don't need to save as much money as you thought and could buy a home sooner than expected.
7. Consider taking advantage of the current very low mortgage rates. Since rates are at historical lows now, why not consider buying a home? The principal and interest payment on $300,000 at 3.875% is $1,410.71. At 4.875%, the payment increases to $1,587.62 or $176.91 more per month or 12.5% higher. Will your income increase 12.5% in the next couple years?
Mortgage lending is extremely complicated. I started this service to help buyers like you navigate the mortgage loan process, find the right lender, and compare and negotiate the best loan. I'm not a lender and do not offer loans, but I do connect borrowers with quality lenders with the lowest rates to help you reduce your costs as much as possible. I'm paid a flat rate by the borrower and I look out for your best interests. My average client has saved over $10,000 on their loan and been able to achieve peace-of-mind through the process. Let me show you how much I can save you!
Call NOW at 949-484-6322.