Basics of Home Lending

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Buying a home can be an undertaking whether you’re a seasoned pro or a first time buyer. There’s lots of pieces to move into place, from finding the right location and the right property to making sure all the financials are in order for a smooth closing. And none of that even accounts for the process of actually moving.

Often cited as one of the most stressful parts of the entire real estate transaction is financing. Luckily, we’ve got some tips for you on how to navigate the financial part of your purchase with ease!

Find a Lender you Trust

This can be just as important as finding a realtor you trust. This is likely one of the biggest financial transactions you’ll ever enter into, working with someone that you trust to help you through the process is key. Use your personal or professional networks to get recommendations, or ask your realtor if they have a lendor they trust. Do your research, compare companies and rates, and make sure you’re comfortable asking questions and working closely with the lender you choose.

Get Prequalified and Preapproved

Once you’ve picked a lender, you’ll want to get prequalified. This is an initial screening that allows your lender to establish your creditworthiness and give you a ballpark figure that you’re likely to be approved for in a home loan. A preapproval is a very important next step when you are ready to begin making offers on properties. A preapproval letter from your lender shows that you qualify for a specific mortgage amount. Often offers with preapproval letter are selected over offers without one, because they are less risky to the seller. In order to get a preapproval, you’ll need to provide documents to your lender about your earnings like W-2’s or 1099’s as well as taxes, pay stubs and banking information. They’ll want to know your financial picture before approving you.

Know your Budget

Once you’ve jumped into working with a lender, you’ll start to have a picture of what kind of mortgage you are likely to be approved for, but that is only part of the picture. You’ll want to look at your finances and determine what kinds of payments you are comfortable with. Once you’ve got the numbers from your lender, plus knowledge of what you’re comfortable spending on a home, you’ll know what your price range should be when you’re looking at properties.

Consider Other Ownership Costs

Another important element of the financial picture of home buying is to consider the associated costs of home ownership. This is things like regular maintenance, emergency repairs, insurance, property taxes, and homeowner’s association fees (if applicable). Over time your home will need regular maintenance and upkeep, but also might have a few surprise costs as well. Factor these into your budgeting choices to be sure you’ve thought through everything.

A word from our preferred lender, Christine Broyhill of Wells Fargo – I work with many real estate agents in the Washington DC, Virginia & Maryland areas.  By far Aaron Podolsky is one of my favorite agents to work with! He truly makes my job as a lender pretty easy because he communicates very well with his clients, and knows exactly what they are looking for from a home to a mortgage.  He does an excellent job negotiating on their behalf. I know because I have been part of many of his transactions from start to finish, and his clients constantly sing his praises. If you are looking for an agent that will listen to what you want, and will negotiate the very best transaction possible…then Aaron is the right agent for you.   You will receive the time and attention you deserve to get things done and have great results!!!

 

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