Welcome to 2022. We made it. Anyone else happy to wave goodbye to 2021?
Have you started on your New Year’s Resolutions, or are you like me and don’t have any? I prefer to have goals instead of resolutions. A resolution is defined as “a firm decision to do something”, and the word I don’t like in that definition is ‘firm.’ It seems movable to me, and I like the black and white defined lines of goals. Properly set goals are measurable, defined, attainable, relevant and time-bound.
How many of you have a goal of buying a house in 2022? Today I’ll discuss some steps to take in preparation for achieving this goal. It’s important to note that the sequence of these steps may be different in a significant way for first-time buyers. With that in mind, let’s get rolling!
Step 1: Find a reputable and trusted loan officer
Perhaps one of the most important steps on this list, a good loan officer can make all the difference in your home-buying experience. Whether you’re buying your first home or your seventh home, a good loan officer can cater to exactly what you need. More importantly, having someone trustworthy is critical for such a big transaction.
Step 2: Get a credit consult with your loan officer
A credit consult isn’t a pre-approval yet, it’s a credit check that is complimentary. If you have near-perfect credit, great! You can expect this step to be a quick process. If you have less than near-perfect credit (which is actually a lot of people) it may take 15 to 30 minutes to evaluate how to improve your score. Sometimes small changes can have a big impact in a small amount of time, and having a professional who can help turn the credit dials correctly makes a big difference.
Step 3: Know your loan options
This isn’t a pre-approval yet. Instead, this is a thorough discussion with your loan officer to determine things like:
✔ Down payment requirements
✔ Components of a mortgage payment (principal & interest, escrow, PMI)
✔ Special programs for certain segments of borrowers and locations
✔ Processing & underwriting sequences and timeline expectations Step 4: Know your buying power
Okay, stay with me, but this also isn’t a pre-approval…yet. Knowing your buying power leads up to your pre-approval, and it will help you and your agent save a tremendous amount of time with your home search. Knowing and understanding your budget limits will eliminate the ‘I wonder if we could afford that house.’ feelings and questions.
Step 5: Find an awesome real estate agent
There are thousands of real estate agents to choose from. Finding a great one is very important. This is a very trusted position and you want to take it seriously. A great agent can be the difference maker between you getting your dream home versus a money pit.
Step 6: Get pre-approved
Finally, right? If you’ve done the other steps outlined above, the pre-approval process is already basically complete. If you haven’t done the other steps, you can still do a pre-approval, but it may take a smidge longer. This process will outline what documents you need to work on organizing in preparation for underwriting. Underwriting doesn’t start until you actually find a house, but preparing ahead of time will make the process painless. And yes, underwriting can be painless.
Buying a house can seem intimidating, but it doesn’t have to be. Use these steps as a simple road map to get to your destination. Getting started might seem challenging but making that first call to a loan officer will line out exactly what you need to do.
The entire team at Fountain Mortgage really enjoys getting to know our clients and giving them several options and scenarios for their specific financial situation. Feel free to call us anytime to get started, and have a great 2022!
This weekly Sponsored Column is written by Fountain Mortgage. Located in Prairie Village, Fountain Mortgage is dedicated to educating, and thus empowering, clients to make the best financial decision possible for their situation. Contact Fountain today.
Mike Miles NMLS ID: 265927; Fountain Mortgage NMLS: 1138268