So you think you are ready. After all this dreaming, planning, and talking with friends and families, it is about time you set out to find your new home. But, wait! There may be just a few more people you need to speak to before you even start looking at the home listings—the loan officers.
Why go to a lender when you are this early in the process? To get pre-approved so you know which mortgage programs you are eligible for, how much you are qualified for, what is the interest rate you will be able to get, etc. given your financial situation and credit history. The pre-approval letter prepared by the lender will not only help prevent you from going off your budget but more importantly also make the closing less time pressed for you.
Keep these tips in mind:
1. Shop around for a good deal. Don’t be afraid to go to different lenders and see what each can offer you.
2. Your credit score will go lower every time a credit report is pulled on you, so try to get a copy of your credit report and show that to the lenders. This way shopping around doesn’t hurt you.
3. The actual APR (Annual Percentage Rate) on your mortgage will differ from the interest rate the lenders tell you at pre-approval because it takes in account other fees and the mortgage insurance (which will likely be eliminated if you purchase with City First Homes’ Down Payment Assistance Loan) on top of the basic interest rate. You need not to be worried though. You will know the exact rate after placing the contract.
4. Be honest. As much as you love good deals (we do too!), please be honest about your financial circumstances so that the lenders will be able to provide you with an estimate as accurate as possible. We can tell you from experience that this will save you from serious headache in the future.
Want to learn more about home purchasing? Stay tuned for our next blog post. It will come out soon! Hope by then you’ve already been pre-approved.
- Anlan Zhang
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