Be The Best Buyer You Can
The Most Important Steps
The nice homes and good deals will cause competition. What we are trying to say is- you will be competing with OTHER BUYERS! To win, you must be better than them.
1. Don’t Get “Pre-Qualified”- Get Approved! Do you want to get the best house you can for the least amount of money? Then make sure you are in the strongest negotiating position possible. Price is only one bargaining chip in the negotiations, and not necessarily the most important one. Often other terms, such as the strength of the buyer or the length of escrow, are critical to a seller. In years past, we always recommended that buyers get “pre-qualified” by a lender. This means that you spend a few minutes on the phone with a lender who asks you a few questions. Based on the answers, the lender pronounces you “pre-qualified” and issues a certificate that you can show to a seller.
Sellers are now aware that such certificates are WORTHLESS, and here’s why! None of the information has been verified! Oftentimes- unknown problems surface! Some of the problems, we have seen, include recorded judgments, child support payments due, glitches on the credit report due to any number of reasons both accurately and inaccurately, down payments that have not been in the clients’ bank account long enough, etc.
So the way to make a strong offer today is to get “pre-approved”. This happens AFTER all information has been checked and verified. You are actually APPROVED for the loan and the only loose end is the appraisal on the property. This process takes anywhere from a few days to a few weeks depending on your situation. It’s VERY POWERFUL and a weapon we recommend all our clients have in their negotiating arsenal.
Think about it. If you were the seller and two buyers came to the door offering the same money, one is pre-approved and the other is not… who would you sell your house to?
2. Don’t waste your time. We only want to look at homes you can afford. As a home buyer, it is important to know not only how much you qualify for in the way of a home loan, but to learn what your payments are going to be, and how much out of pocket expense your purchase is going to require. Knowing the facts about the different loan packages and options also has benefits. You may be pleasantly surprised at some of your options.
3. Finding a lender. Your relationship with a mortgage lender is an important one. There are almost as many mortgage lenders and mortgage loan programs available as there are grains of sand on the beach. Choosing a mortgage lender that is reputable, honest, and that will research your needs and communicate with you may take some research. We work with lenders on a daily basis, and will be glad to help you get started.
Property Buying Frequently Asked Questions
What types of mortgage programs are available?
Currently, there are over 50 different mortgage products available, including:
- 15, 20, and 30 year Fixed Rate loans
- Adjustable Rate loans
- VA and FHA loans
- New Construction financing
- 5 and 7-year Balloon loans
… and many more
Speak to your local mortgage professional to see what’s right for you.
What documents will I have to provide?
Be prepared to provide verification of income (including a pay stub and recent tax returns), bank account numbers and details on your long-term debt (credit cards, auto loans, child support, etc.). If you’re self-employed, you may also be required to provide financial statements for your business.
What’s included in my house payment?
Principal and interest on your loan. Depending on the terms of your loan, the payment may also include hazard (homeowners) insurance, mortgage insurance and property taxes. You may or may not have impounds for insurance and/or taxes.
What do the closing costs include?
Closing costs cover processing and administration of your loan. In addition to a loan fee, you’ll usually be asked to prepay interest charges to cover the partial month in which you close, and you may be required to deposit monies into an escrow account for property taxes, hazard insurance and mortgage insurance.
When do my mortgage payments start?
Usually 30 days after closing. The actual date of your first payment will be included in your closing documents.